Wednesday, April 25, 2018

MTN has largely complied with license obligations but some areas lacking

By Esther Nakkazi

The Uganda Communications Commission or UCC has published an evaluation report showing MTN Uganda Ltd’s regulatory compliance since it gained a National Telecommunications Operators license in 1998.

However, the report covers only the past ten years of UCC monitoring the operations of MTN evaluation focused on three broad categories of obligations; the financial, legal and technical.

Whereas MTN has to a large extent complied with most of its license and regulatory obligations, there are a number of outstanding areas of non-compliance which must be addressed before UCC processes its application for renewal of a license, says Godfrey Mutabazi, the UCC executive director in the report.

The report says MTN has largely provided uninterrupted telecommunications services during the course of its license in accordance with the laws of the Republic of Uganda. MTN got its license on April 15, 1998, from the Government of Uganda acting through the Minister of Works, Transport and Communications and UCC granted it an NTO license.

But it is due to expire in October 2018 and in accordance with the provisions of its National Telecommunications Operators (NTO) license, has formally submitted its application for a single term renewal of the license for another ten years.

The report says the evaluation will enable UCC to consider the application for renewal of MTN’s license. The evaluation reveals that MTN has largely been compliant, providing uninterrupted telecommunications services to Ugandans for over 20 years as an NTO.

As at 31st December 2017, MTN Uganda recorded growth in its subscriber base with 239,047 fixed lines and 11,587,207 mobile subscriptions. The client base is serviced by a national radio network of more than 1,637 base stations and it is fibre network that spans 4500 kilometers and a national mobile agency network of 77,144 among others.

Its revenues have also grown to more than UG Shs 1.3 trillion and have been recognized as one of the top taxpayers as well it has participated in various corporate social responsibility drives.

The report says MTN has pretty much complied with its financial obligations, for instance, its payment of the Levy on the Gross Annual Revenue, the initial Bid fee and Initial fee and maintains accounting records with acceptable accounting principles in accordance with the license agreement.

But points out that it has failed to comply with payment of assessed spectrum fees with an outstanding balance of Ushs 27,979,938 and has also failed to pay authorized fees for two invoices amounting to $295 and $3,540.

Throughout the monitoring period, it was observed that MTN which is obliged to interconnect with other licensees, so that users of one operator can communicate and access services with users of another operator, has indeed interconnection agreements with a number of licences like UTL, Airtel, Sure telecom, Simbanet, Afrimax, Africel/Orange and Smile Communications .

However, MTN has failed to meet statutory timelines for interconnections with One solutions Ltd, MTN-Simbanet, Roke Telecom. MTN has submitted that for these ones the obligation is not exclusive to them but UCC says the dual responsibility does not absolve MTN of its interconnection duties with the interconnection seekers.

Furthermore, it is also faulted for charging Ush 3 higher domestic interconnection fees. UCC requires MTN to charge domestic interconnection fees of Shs 112, a fee set in 2012, but MTN unilaterally levies Ushs 115. To this MTN argues that UCC did not have the powers to set interconnection rates by 2012.

UCC also says MTN has failed to report material information about the integrity of billing platforms. Over 360,000 incidents of erroneous billing were reported between June and Oct 2014, by MTN data customers.

However, even if MTN is obliged to report these matters to the regulator, it did not until its integrity questioned. Adamantly, MTN says it was under no obligation to report such incidents to the Regulator and only admitted to ‘multiple bundle loading and system logic failure and reimbursed some affected customers. But UCC maintains that the delay in communication of billing system malfunctions to its client base and to the regulator was negligent of MTN. 

UCC also observed that MTN delays in resolving consumer complaints, citing the last 2 years when it failed to resolve consumer 90% of complaints in 24 hours as the agreed threshold. It only managed to resolve 76.5% of complaints within the stipulated timelines.

It also noted that MTN is non-compliant with regulatory directives and continues to send out unsolicited messages without ‘opt out’ information contrary to UCC directive requiring all operators to stop such messages.

MTN in response argues that it instructed its content provider to ensure that all messages have ‘opt out’ messages. But UCC says MTN only applied this directive to 3rd party content providers and not MTN’s own unsolicited messages.

UCC is still receiving input from the public about the performance of MTN Uganda ahead of its license renewal. A public hearing was held on 26th March 2018 and UCC heard from MTN’s clients.

Ultimately, the regulator says if the decision is made to renew the license, the terms and conditions under which MTN Uganda’s new license will be granted will be different.

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