MTN sues UTL for sh5.6 billion debt

by Yunusu Abbey A ROW has broken out between Uganda Telecom Ltd (UTL) and MTN Uganda over a sh5.6b debt.MTN, which started its cellular phone operations in Uganda in October 1998, has reportedly filed a civil suit against UTL demanding sh5.6b for inter-connection fees. UTL officials yesterday said MTN had taken action against them over the debt. Aimable Mpore, the UTL managing director, told a press conference in Kampala yesterday that the money accumulated since April 1999. He said he did not have details about the suit because they had not been formally served. UTL was privatised on May 30, 2000. The consortium which included Telecel International (Switzerland), Orascom (Egypt) and Detecon Gmh (Germany) paid $33m for the 51% stake in the then state-owned company. Inter-connection occurs when a client calls from one network to another. For instance, when an MTN subscriber calls a UTL Mango line, a fee is charged for using the other’s network.But if a subscriber calls on the same network, say from Mango to Mango, or MTN to MTN, there are no inter-connection charges. The longer one spends talking on the other firm’s network, the higher the inter-connection fees.Mpore, however, said an inter-connection agreement between MTN and UTL was signed last month. He said the pact was still binding.He said, “From January 2001, UTL and MTN engaged in elaborate discussions and exchanged numerous correspondences on trying to establish the outstanding amount on interconnect fees. “It must be noted that both parties had hitherto not established the traffic minutes between the two networks so as to determine the outstanding charges.” Mpore, who read from a prepared text, said, “Even before the reconciliation process was complete, UTL began making substantial payments in this regard.” UTL has apparently been paying sh600m monthly to MTN to clear the debt.“From September 2001 to date, UTL has paid sh3.5b upon prevailing agreed terms. In addition, UTL has in the same vein, made a reasonable payment plan, to MTN, for the full retiring of the outstanding amount,” Mpore stated.But an MTN official yesterday said they had decided to go to court because the amount UTL owes them keeps on accumulating every month.“For instance, every time they pay us, there is another sh400m as a new bill. There is another disputed sh6.5b debt which is yet to be reconciled. “But we have no problem with Celtel because they never query our inter-connection fees and always pay us promptly. “There is more to what the UTL boss (Mpore) is telling the public,” said the MTN official who declined to be named. Mpore said, “Our deliberations and discussions with MTN on this issue have all along been cordial and constructive. “We are therefore shocked and dismayed at the action MTN has now taken. We have tried to establish the possible motives and have had no choice but to conclude that MTN’s actions are based on an intent to compromise the confidence of our customers and institutional partners and also to create a perception of diminished institutional integrity,” Mpore said.Mpore, who was visibly unhappy, said, “We believe that MTN’s ultimate goal is to reap unfair competitive gains from this publicity.” He added, “We would like to assure our customers and institutional partners that none of these negative tactics will succeed. Uganda Telecom is growing from strength to strength and no amount of malignment will deter our growth.“May be our actions in the market (expansion programme) and the growing number of customers could be causing problems to our competitors.”He added, “Today, we are proud to tell you that our mobile division stands at 85,000 subscribers—only 14 months since we launched the network. “Our landlines have also grown to 55,000 customers, while our data and Internet customer base is growing.“Today, UTL boasts of over 145,000 subscribers all being supported on the biggest integrated telecoms network in Uganda. We assure our customers of our continued commitment to a professional, innovative and reliable service. I think with 85,000 subscribers (Mango), that is not a good message to MTN,” he stated.