Uganda: UTL to Appeal Against MTN's Sh5 Billion Court Ruling

Mergers, Acquisitions and Financial Results

Uganda Telecom has no plan to pay Shs5 billion in fees and interest to MTN Uganda, despite a High Court order to the firm to do so. Instead, the mobile operator will appeal against the court ruling to save itself from the cost, Daily Monitor was informed on Monday.

"We are very disappointed with the ruling made by the High Court. We are contemplating appealing this ruling very soon," Mr Stanley Henning, the deputy managing director Uganda Telecom told journalists at press a conference in Kampala.

Utl plans to file its appeal to the High Court within the 14 days in which it was ordered to pay the money. Last week, Justice Geoffrey Kiryabwire, of the commercial division of the high court, ordered Utl to make the payment as part of the money owed to MTN, in inter-connect fees for the period between 2008 and 09.

Inter-connect fees are rates mobile operator charge each other to enable customers of other networks to make calls on their telecommunication networks.

MTN has claimed disputed inter-connect fees amounting to Shs20 billion from Utl through the commercial court.

Of this total, Shs5 billion is attributed to unpaid inter-connection fees, interest and legal costs arising from MTN calls made to Gemtel a Southern Sudan network which is partly owned by Utl.

The other Shs15 billion is attached to fees arising from MTN calls to Utl calls in Uganda. The firm has so far cleared Shs2 billion of the debt. Utl has disputed the High Court decision on the account that it was made on unfair grounds since the Shs5 billion that is claimed is attributed to inter-connect fees of a company in Sudan not in Uganda.

The inter-connect payment agreement between Utl and MTN is limited to local traffic.
But Justice Kiryabwire ruled that communication traffic carried by Utl on MTN's behalf to Southern Sudan was local traffic. This, because Gemtel uses the calling code +256477 which the court recorgnised as a local call. "We find this absurd as Utl's network and Gemtel's are two distinct networks located in two different countries and locations," Henning said.

GEMTEL started using the Uganda code in 2006, after the government granted Utl permission to further authorize GEMTEL to use Uganda's international code.

Upon this arrangement, Utl requested MTN to treat traffic on the Sudan network as international not local. However, MTN rejected the appeal although it continued sending traffic to Sudan.