MTN To Cut Links With Uganda Telecom Over Three-Year Debt

A three year dispute over inter-connectivity fees has culminated in MTN Uganda announcing that it is severing interconnectivity with its industry rival Uganda Telecom (UTL), the Daily Monitor reports.

“MTN customers will therefore be unable to place direct calls to UTL subscribers, and vice-versa,” MTN said in a notice on Wednesday. “This action has been necessitated by UTL continuously defaulting on the settlement of its interconnect payments, amounting to about Shs20 billion accumulated over a period of three years,” the statement added.


In an earlier separate interview, UTL company Secretary Donald Nyakairu said the company was in the process of settling MTN’s dues. This, however, seems not to have materialised.

The stand-off comes after a row between the two companies, stemming from 2006 over the unpaid interconnectivity fees ended in UTL failing to pay MTN. UTL has also been in dispute with Warid Telecom and Airtel Uganda over unpaid interconnectivity fees all totalling to over Shs12 billion.

The Uganda Communications Commission (UCC) is also demanding Shs9 billion in unpaid yearly fees from UTL although its Interim Executive Director Godfrey Mutabazi declined to elaborate on the matter.  “Interconnectivity issues are between telecom subscribers,” Mr Mutabazi said yesterday. “We only encouraged dialogue but we do not interfere.” Yesterday, MTN said UTL had unjustifiably and persistently refused to honour their business obligation and attempts to resolve the matter failed.

MTN last year took UTL to court and secured an order to pay the money in dispute.  Court documents obtained by the Daily Monitor indicated that between November 2008 and 2009, MTN demanded Shs7 billion in outstanding interconnectivity fees.

In February 2008, it issued UTL with another invoice demanding another payment of Shs6 billion, also for interconnection fees for March 2007 to December 2007.  UTL paid Shs3 billion but said it would not pay the balance of Shs3 billion which it said was not as a result of domestic traffic which attracts interconnectivity fees but was international traffic with Sudan.

In 2006, Ms GEMTEL a telecom operator in South Sudan requested Uganda to facilitate its calling code. On May 10, 2006, Works Minister John Nasasira wrote to UTL approving a request to extend its network coverage to South Sudan. UTL notified Gemtel that it will grant it usage of code +256 477.  +256 is the official Uganda country code.

On June 22, 2006 UTL informed MTN that it had set up interconnection with GEMTEL adding that it had been assigned +256477 which is a Ugandan calling code. MTN says this is the source of the accumulated fees.