MPs grill MTN bosses

By John Odyek MPS yesterday grilled the bosses of MTN mobile phone giant over allegations that their company was repatriating huge sums of money out of the country, over charging its customers and using old equipment. The parliamentary committee on works, housing and communications accused MTN of having an insufficient network coverage and not taking responsibility for health hazards associated with mobile phones. Senior MTN Uganda officials appeared before the committee. The officials denied that they repatriate large sums of money out of the country. They said their services were one of the cheapest in the world and they had new equipment designed for Uganda. They said present research showed there were no health hazards associated with using mobile phones. MTN Uganda were awarded a Second National Operator License by the Government in 1998 as part of the privatisation programme of the telecommunications industry. The company was expected to provide efficient services under a five-year exclusive license. Committee chairman Yorokamu Katwiremu (Sheema South) told The New Vision that the committee would pass their recommendations to the Uganda Communications Commission, the regulators of the industry. Dr Okulo Epak (Oyam South) asked why consultancy and expatriate fees should be paid quickly. Nathan Byanyima (Bukanga) asked whether customers could not be allowed to receive calls without paying service fees when they have airtime. Mike Blackburn, the Chief Financial Officer of MTN Uganda, said the company expatriated US$1.6m to purchase equipment. Blackburn said between April and August, they bought $10m of which $2m was used locally to pay suppliers and $10m to pay foreigners. He said in the same period, $600,000 was used to pay for technical costs from MTN South Africa. "MTN Uganda has never paid a dividend to its shareholders," he said. He said the company made a net loss of sh3.374b at the end of 1999 and made a net profit of sh566m at the end of March 2000. He said in their third year of operation, the company was about to break even. Charles Mbire, MTN Uganda director, said the company was expanding its network. He said MTN contributed 1% of its annual gross revenue to a Uganda Communications Commission fund to improve rural communications. Erik Van Veen, the general manager for sales and marketing, said the word "compensating" customers for lost air time was dangerous. He said it was not the usual practice and huge sums of money would have to be paid by service providers such as the Uganda Electricity and Uganda Telecoms Limited whenever they have a break-down.