MTN Uganda’s Long Journey to License Renewal

Uganda Communications Communication (UCC) has finally renewed MTN Uganda’s license after almost two years of waiting.

The company’s license had expired in October 2018 and had not been renewed since then. Security concerns and a row over license fees had delayed the renewal of the operator license needed to run a telecommunications system.

Security concerns and reports of profit repatriation had even led to the deportation of top officials, including CEO Wim Vanhelleputte, chief marketing officer Olivier Prentout, Elsa Mussolini, the general manager for mobile money, and Annie Tabura (Rwandan), the general manager for sales and distribution.

Vanhelleputte only returned to Uganda after President Yoweri Museveni pardoned him.

At the end of 2018 and at the start of the following year, Museveni protested a UCC decision to cut the license fees for the renewal from $100m (Shs372bn) to $58m (Shs216bn) for a period of 10 years.

He was quoted as saying that MTN had “reaped vast profits, most of which have obviously been repatriated,” and therefore “the company’s obligation to sow where it intends to reap for the next 10 years, as well as its ability to do so are and cannot be in doubt.”

In its defence on the waiver, UCC had argued that it wanted MTN Uganda’s fees cut to help it meet the requirements of a new broadband policy for telecoms to erect infrastructure to boost the quality of voice calls and data speed.

MTN had been issued with a 20-year license in 1998. Upon expiry, UCC kept issuing extensions as negotiations on the security and fees issues went on.

Recently MTN announced that UCC had confirmed its decision to renew the license for a period of 12 years.

Expected to take effect in July 2020, the new license will expire in July 2032.

For the renewal to happen, UCC had to obey Museveni’s order denying  MTN  any waiver. The largest telecom operator, owned by owned by South Africa’s MTN Group, paid Shs372bn.

In a statement, the company said: “MTN Uganda is now pleased to announce the conclusion of negotiations for the renewal of its second national operator license which expired in October 2018.

“MTN has fulfilled all conditions precedent to the license, including the payment of a total sum of $100 million as license renewal fee for a period of 12 years commencing 1 July 2020.”

But the signature of the License Agreement between MTN and UCC will happen “within the coming days.”