MTN to bar UTL calls over debt
Mar 08, 2011
MTN Uganda has threatened to terminate its inter-connection agreement with Uganda telecom (UTL) over sh20b a debt. The money is said to have accumulated over a period of three years.
By David Mugabe
MTN Uganda has threatened to terminate its inter-connection agreement with Uganda telecom (UTL) over sh20b a debt. The money is said to have accumulated over a period of three years.
The termination means UTL subscribers, totaling about 1.75 million, will not be able to make calls to MTN customers. MTN subscribers will also not be able to make calls to UTL customers.
Inter-connection fee is the amount of money an operator pays another for routing traffic through their networks. In June 2010, Uganda Communications Commission (UCC), the industry regulator, published a new inter-connection fees structure of sh131.
According to MTN, the cancellation takes effect on Monday, March 14.
The development predicts a turbulent industry where “cold wars†are brewing over unsteady revenue bases and the threat of business positions sparked off mainly by the price wars.
UCC boss Godfrey Mutabazi said MTN’s decision had a business component to it. He said UCC’s role was to ensure that connections were not interrupted.
“That is a private arrangement between MTN and UTL,†said Mutabazi.
However, what UCC fails to highlight is the protection of the third party, the consumers, whom they are primarily supposed to protect.
Themba Khumalo, the MTN Uganda chief, said his company had tried all means to recover their money to no avail.
“UTL has continuously defaulted on the settlement of these payments. Inter-connection fees are pre-paid by customers, but UTL has failed to justify why they are not remitting these payments,†Khumalo said yesterday.
“Continuing to operate along this model makes interconnection fees a business risk rather than an enabler, as the debt continues to grow,†he added.
A senior UTL official who preferred anonymity said they had not been served with a notice.
“There is a legal process currently running between MTN and us on the amount payable. Once we get a judgment, we shall abide by it. However, it is a big concern to us because their move could be outside the legal process,†said the senior executive.
Khumalo said MTN officially served UTL with six-months’ notice on June 23, 2010, citing the agreement in 2001.
He said the termination had been communicated to UCC and UTL.
MTN Uganda has threatened to terminate its inter-connection agreement with Uganda telecom (UTL) over sh20b a debt. The money is said to have accumulated over a period of three years.
The termination means UTL subscribers, totaling about 1.75 million, will not be able to make calls to MTN customers. MTN subscribers will also not be able to make calls to UTL customers.
Inter-connection fee is the amount of money an operator pays another for routing traffic through their networks. In June 2010, Uganda Communications Commission (UCC), the industry regulator, published a new inter-connection fees structure of sh131.
According to MTN, the cancellation takes effect on Monday, March 14.
The development predicts a turbulent industry where “cold wars†are brewing over unsteady revenue bases and the threat of business positions sparked off mainly by the price wars.
UCC boss Godfrey Mutabazi said MTN’s decision had a business component to it. He said UCC’s role was to ensure that connections were not interrupted.
“That is a private arrangement between MTN and UTL,†said Mutabazi.
However, what UCC fails to highlight is the protection of the third party, the consumers, whom they are primarily supposed to protect.
Themba Khumalo, the MTN Uganda chief, said his company had tried all means to recover their money to no avail.
“UTL has continuously defaulted on the settlement of these payments. Inter-connection fees are pre-paid by customers, but UTL has failed to justify why they are not remitting these payments,†Khumalo said yesterday.
“Continuing to operate along this model makes interconnection fees a business risk rather than an enabler, as the debt continues to grow,†he added.
A senior UTL official who preferred anonymity said they had not been served with a notice.
“There is a legal process currently running between MTN and us on the amount payable. Once we get a judgment, we shall abide by it. However, it is a big concern to us because their move could be outside the legal process,†said the senior executive.
Khumalo said MTN officially served UTL with six-months’ notice on June 23, 2010, citing the agreement in 2001.
He said the termination had been communicated to UCC and UTL.