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.

LAP Aquires 80% Stake in Sudan's Gemtel

Libyan government investment vehicle Libyan African Investments Portfolio (LAP) has acquired an 80% stake in Southern Sudanese telecoms operator Gemtel via its telecoms arm, LAP Green Networks, Ugandan news source The New Vision reports.

Gemtel was licensed by the Government of Southern Sudan (GoSS) in 1996 and launched commercial GSM services shortly after in the cities of Juba and Yei. By mid-2009 the company had expanded its footprint to cover Waw, Torit, Bor and Rumbek.

Gemtel uses the dialling code of Uganda (+256), thanks to an interconnection agreement with Uganda Telecom (UTL) signed in September 2006, which allows the cellco to use the gateway for USD50,000 in interconnection fees per month.

LAP Green already operates in East Africa through its 80% shareholding in Rwandan fixed line and mobile telephony operator Rwandatel and 69% stake in UTL. The company also holds an interest in Sahelcom and Sonitel of Niger, and controls Oricel Green, a mobile operator in Cote d’Ivoire.

According to a statement from LAP Green, the firm has been shortlisted to buy a 75% stake in Zambia’s sole fixed line operator, Zambia Telecommunications Company (Zamtel).

Uganda Allows Gemtel to Use +256 Code

The Daily Monitor reports that the Ugandan government has cleared a South Sudan network to continue using Uganda’s dialing code (+256), under the condition that the region’s cellcos continue to pay for it.

The decision follows complaints from Ugandan MPs that Southern Sudan mobile operator Gemtel was given leeway by Uganda Telecom (UTL) to use the national code without parliamentary approval. Defending the move, State Minister for ICT Alintuma Nsambu told the country’s ICT Committee, ‘In any case we gain more if there is a bigger clientele in South Sudan using our code, the Uganda Communications Commission (UCC) will collect more.’

The issue was widely publicised in 2007 after the Parliamentary Committee on State Enterprises learnt that Gemtel was using the country code without paying.

South of Sudan is currently served by two wireless network operators; privately-owned Gemtel, which offers limited coverage of a number of southern towns including Juba, Waw and Yei; and Lebanese-owned Vivacell, which launched commercial wireless services in January 2009.