MTN Uganda Weighing Legal Action over UCC UGX 5 Billion Fine

2988 Views Kampala, Uganda

In short
Mobile telephone operator MTN Uganda is considering legal redress over Uganda Communications Commission's fine of five billion shillings for persistently using disallowed short messaging codes. MTN Uganda is also contesting the requirement that it shifts its recharge and airtime balance codes from 155 and 156 to 130 and 131 respectively.

Mobile telephone operator MTN Uganda is considering legal redress over Uganda Communications Commission's fine of five billion shillings for persistently using disallowed short messaging codes.
 
MTN Uganda is also contesting the requirement that it shifts its recharge and airtime balance codes from 155 and 156 to 130 and 131 respectively. This is required to harmonise the codes under the Eastern One Area Network arrangement.
 
Under the One Area Network, all mobile telephone operators in East Africa are also expected to use the 100 code for customer care, but MTN Uganda uses it for voice mails. All other operators complied with the requirements some time back except MTN Uganda that delayed.
 
Addressing a press conference in Kampala, the Chief Executive Officer of MTN Uganda, Brian Gouldie, said they want the UCC to review the process that led to the five billion shilling fine and reconsider the mechanism of how the sanction was imposed.
 
On migration of the codes, Gouldie said abrupt shift of the codes would not be in the interest of their customers, now estimated at 10.4 million strong.
 
Gouldie argued that MTN Uganda's major concern is the impact migration of the codes will have on the 4.9 active users of the 155 code and the 1.4 active users of the 156 code with over 300 million transactions between them monthly.
 
He said MTN Uganda has been using the codes for 15 years with authorization from UCC and changing the codes overnight would be inconveniencing for their customers, many of whom are hard to reach, adding that the interests of the customers must come first.
 
According to Gouldie, abrupt migration is not easy and takes time and expertise because it means re-synchronizing all sim cards, airtime cards and other enabling platforms. He said the exercise is also expensive as it requires massive advertising, sensitization and outreaches, all borne by the operator.
 
Gouldie said although in principle they agree on the codes migration, they would love it carried out in a phased manner so that it is smooth for all parties. Interestingly, Gouldie admitted that since 2007 they have been engaging with UCC over the matter but to no avail.
 
Gouldie said in November 2014 they received a directive to shift the codes but still requested for more engagements, with their very last request having been sent on February 3rd last month. He said they were shocked to receive a letter from UCC breaking all engagements unless they implement the directive which he still termed ‘abrupt and draconian'.
 
Describing their relationship with the regulator as cordial, the MTN Uganda chief executive officer said he still requests that they engage to amicably resolve the matters so that, as he put it, ‘the interests of the customers are not affected'.
 
Gouldie said should their request for amicable resolution of the sticking points still fail, MTN Uganda wouldn't hesitate to seek legal redress to enforce its rights, stressing on the codes migration that the operator was authorized to use them in the first instance.
 
He boasted that MTN Uganda remains the biggest local contributor to the economy, pumping 143 billion shillings in taxes, spurring infrastructure development and creating jobs. In addition, he added, the operator contributes 50 billion shillings to the Rural Communication Development Fund.
 
On mobile money, Gouldie said MTN Uganda strives to improve the effectiveness and security of the system, adding that they are committed to deepening financial inclusion of the unbanked in Uganda.
 
On the audit of mobile telephone operators, MTN Uganda, which was the first to be audited, leading to sanctions like the fine, said all operators should be treated equally.
 
Without mentioning names, Gouldie said concerns about dodging taxes and tagging international calls as local ones must be thoroughly looked into.