MTN Uganda licence renewal now goes to Cabinet

Monday June 4 2018

An MTN Mobile Money agent in Kampala. NMG

An MTN Mobile Money agent in Kampala. The fate of MTN Uganda’s application for a 10-year renewal of its licence now lies with the Cabinet. PHOTO | MORGAN MBABAZI | NMG 

By CHARLES M. MPAGI
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The fate of MTN Uganda’s application for a 10-year renewal of its licence now lies with the Cabinet.

The Uganda Communications Commission (UCC), which conducted a public hearing on the licence, has recommended renewal with some conditions.

The telco had expected word on its application for a 10-year renewal by May 26 as their current licence expires in October.

A source at UCC said that the regulator’s final report had been shared with both MTN and the Information and Communication Minister Frank Tumwebaze. However, Mr Tumwebaze said he is yet to see the report and has asked the UCC for it.

“I wrote to UCC on Tuesday to ask for that report,” Mr Tumwebaze told The EastAfrican in a telephone interview.

He said the Cabinet has now taken up the matter and will give the final verdict.

With more than 11 million subscribers out of an estimated 23 million, there is little doubt that MTN’s licence will be renewed, but sources both at UCC and Cabinet say that the renewal will come with stringent requirements.

One of the requirements is that MTN list on the stock exchange to give Ugandans a chance to own a portion of a telco that has been raking in handsome profits since its inception 20 years ago.

Local listing was one of the demands made at a public hearing conducted by the UCC in April.

Another condition is that MTN and other telcos share masts and other infrastructure, and have a presence in all parts of the country.

The Cabinet is also expected to demand that the telco guarantee a 4G network for urban areas and a 3G one for rural areas throughout the country.

The government is finalising a broadband policy that will focus on ways and means to deliver Internet coverage to rural areas cheaply, Mr Tumwebaze said in a separate interview.

“The Cabinet is developing serious reforms for the sector,” the source confirmed.

Fred Otunnu, the senior communications officer at UCC, said the commission had finalised its report but declined to give details on any new conditions being set for MTN. He confirmed that the regulator is recommending renewal.

A 2015 report put MTN ahead of the competition with nearly half of all Ugandan subscribers, at 44 per cent.

Indian-owned Bharti Airtel has a 32 per cent share of the market, followed by Uganda Telcoms with eight per cent and Africel at four per cent.
MTN has come under increasing pressure lately as the government seeks to claim a bigger share of the company’s profits.

The government accused MTN of under-declaring its call volume. but the biggest area of concern has been the runaway success of MTN Mobile Money.

After increasing transactional taxes in previous years, a new Excise Duty (Amendment) Bill passed by parliament on Wednesday imposes a one per cent tax on every mobile money transaction. Excise duty on mobile money has been increased from 10 to 15 per cent on top of these transactional charges.

The government has targeted social media communication in its latest push to raise more revenue, imposing a Ush200 ($0.05) daily charge on users of social media platforms.

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