The High court in Kampala has upheld a decision by Uganda Communications Commission (UCC) demanding Shs 51 billion ($14.14m) as license fees from a telecommunications company, MTN-Uganda.
In July last year, UCC wrote to MTN asking the company to pay a license fee for the transitional period of October 21, 2018, to June 30, 2020. This is a period during which MTN didn't have a running telecom license which 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 $51 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 November 21, 2018.
The period was further extended on March 21, 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, UCC communicated its decision to renew the license for a term of 12 years from July 1, 2020.
In the letter, UCC indicated that MTN would be required to pay license fees for the transition period between October 2018 and June 30, 2020. Consequently, in July 2020, UCC issued a demand notice requiring the applicant to pay a license fee worth over Shs 51 billion for the transition period.
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 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 Shs 51 billion was to be paid on a prorated 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 $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,” Ssekaana ruled.