High Court in Kampala has upheld a decision by Uganda Communications Commission -UCC for telecom company MTN to pay 51 billion Shillings (14.14 million USD) as license fees.
In July 2020, UCC wrote to MTN requiring them to pay a license fee for the transitional period of 21st October 2018 to 30th June 2020. This is a period during which MTN didn’t have a running telecom license, as it had expired in October 2018.
In October 2017, MTN applied to UCC for a renewal of its Second National Operator license which was due for expiry in October 2018. UCC determined that the renewal fees for the applicant license would be USD 58 million for the telecom company to continue operating under the Second National Operator license terms and conditions.
However, in November 2017, UCC deferred the issuance of the renewed license to allow for the alignment with internal government processes. It extended MTN’s operations of the license for a maximum period of 60 days from 21st November 2018.
The period was further extended on 21st March 2019 to ensure continuity while negotiations over the new license progressed. Further extensions were made until 30th June 2020.
Court records indicate that on 18th March 2020, the UCC communicated its decision to renew the license for a term of 12 years from 1st July 2020.
In the letter, UCC indicated that MTN would be required to pay license fees for the transition period between 2018 and 30th June 2020. Consequently, in July 2020, UCC issued a demand requiring the applicant to pay a license fee worth over Shillings 51 billion for the transition period from 21st October 2018 and 30th June 2020.
In response, MTN wrote disagreeing with the premise on which the regulator had assessed the fees payable. It then ran to court seeking an injunction restraining UCC from implementing its decision and in any way interfering with or interrupting MTN operations.
In its application, MTN asked court to prohibit UCC from unilaterally determining and levying the license fees for the transition period saying they are not prescribed by law. MTN wanted any license fee for the transition period to be determined with reference to its Second National Operator (SNO) license.
In defense, UCC argued that the figure was reached at after consultation and a directive from the president was issued to that effect. According to UCC, MTN had been asked to sign for a new license for 14 years including the two years of transition from 2018 to 2020.
However, MTN refused the 14 years and decided to sign for 12 years on an understanding that a separate fee of Shillings 51 billion was to be paid on a prorate basis for the transition period.
In his decision delivered electronically justice Musa Ssekaana ruled that there was no procedural impropriety in the decision made by UCC in imposing transition fees based on a pro-rated assessment.
He adds that the fee was fairly arrived at and guided by the amount paid for of US$100 million a year. “In the final analysis, I find no merit in this application and the same is dismissed with costs to the respondent,” ordered Justice Ssekaana
Court: MTN Uganda Must Pay Shs51bn License Fees
