Uganda Telecom in financial crisis
Jun 20, 2011
THE financial sustainability of Uganda Telecom (utl) remains uncertain following several claims of unpaid dues in billions owed to the firm’s partners and service providers.
By David Mugabe
THE financial sustainability of Uganda Telecom (utl) remains uncertain following several claims of unpaid dues in billions owed to the firm’s partners and service providers.
Among the companies seeking payment is MTN, which for the second time this year, has sued utl claiming unpaid sh9.3b accrued from interconnection charges, indicating a further deepening rift and uncertainty in the telecom industry.
According to sources, the Uganda Communications Commission (UCC) is also demanding about sh6b from utl over non remitted contributions to the rural communication development funds.
All telecom operators are required to remit 1% of their gross revenue to the commission for the fund.
Sources revealed that a fortnight ago, the Uganda Media Owners Association also suspended any form of advertising from utl because of about sh3b unpaid dues accruing from advertising.
The association comprises major media houses, including Monitor Publications, Vision Group, NTV, WBS, UBC, Capital FM, Simba and Sanyu FM.
Airtel Uganda public relations officer Joseph Kanyamunyu said utl also owes them about sh8b from “interconnect and related charges.â€
MTN is also demanding another sh744m in interests accrued from May 31, 2011.
“The actions of the defendant amount to breach of the interconnection agreement between the plaintiff and the defendant,†read the suit.
“They have continuously disputed figures, but in this case they signed and acknowledged the debt, but we are half way the year and they have still failed to pay,†said an MTN official.
The MTN suit filed on June 15 says the interconnect fees are for the period from January 2010 to December 2010.
But utl chief Donald Nyakairu said there was nothing new in the law suit.
“The only difference is in the figures, they are just causing anxiety within the public,†said Nyakairu.
The suit follows an earlier one, filed about three months ago, over MTN’s claims of unpaid sh20b in interconnection charges that the telecom giant says was accumulated over a three-year period.
The interconnection fee is the amount an operator pays another for routing traffic through their networks.
David Ogong, the UCC director of competition and corporate affairs, said they had been mediating over this issue and the two players agreed to keep their networks connected until June 26, 2011.
“We are advising the Government that we could have a big problem in our hands, we have tried our best to see that utl pays,†said Ogong.
The Libyan government owns about 69% of utl under its investment arm, Libya Africa Investment Portfolio.
The Government owns the rest. But a few months ago, government took over full control of utl partly complying with UN sanctions against Libyan assets in the wake of the political turmoil in the North African state.
THE financial sustainability of Uganda Telecom (utl) remains uncertain following several claims of unpaid dues in billions owed to the firm’s partners and service providers.
Among the companies seeking payment is MTN, which for the second time this year, has sued utl claiming unpaid sh9.3b accrued from interconnection charges, indicating a further deepening rift and uncertainty in the telecom industry.
According to sources, the Uganda Communications Commission (UCC) is also demanding about sh6b from utl over non remitted contributions to the rural communication development funds.
All telecom operators are required to remit 1% of their gross revenue to the commission for the fund.
Sources revealed that a fortnight ago, the Uganda Media Owners Association also suspended any form of advertising from utl because of about sh3b unpaid dues accruing from advertising.
The association comprises major media houses, including Monitor Publications, Vision Group, NTV, WBS, UBC, Capital FM, Simba and Sanyu FM.
Airtel Uganda public relations officer Joseph Kanyamunyu said utl also owes them about sh8b from “interconnect and related charges.â€
MTN is also demanding another sh744m in interests accrued from May 31, 2011.
“The actions of the defendant amount to breach of the interconnection agreement between the plaintiff and the defendant,†read the suit.
“They have continuously disputed figures, but in this case they signed and acknowledged the debt, but we are half way the year and they have still failed to pay,†said an MTN official.
The MTN suit filed on June 15 says the interconnect fees are for the period from January 2010 to December 2010.
But utl chief Donald Nyakairu said there was nothing new in the law suit.
“The only difference is in the figures, they are just causing anxiety within the public,†said Nyakairu.
The suit follows an earlier one, filed about three months ago, over MTN’s claims of unpaid sh20b in interconnection charges that the telecom giant says was accumulated over a three-year period.
The interconnection fee is the amount an operator pays another for routing traffic through their networks.
David Ogong, the UCC director of competition and corporate affairs, said they had been mediating over this issue and the two players agreed to keep their networks connected until June 26, 2011.
“We are advising the Government that we could have a big problem in our hands, we have tried our best to see that utl pays,†said Ogong.
The Libyan government owns about 69% of utl under its investment arm, Libya Africa Investment Portfolio.
The Government owns the rest. But a few months ago, government took over full control of utl partly complying with UN sanctions against Libyan assets in the wake of the political turmoil in the North African state.