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Uganda Government Intervenes in MTN-UTL Cash Wrangle

Tuesday 15 March 2011

The government yesterday moved to stop MTN from shutting out Utl from routing its calls through its network. Mr Aggrey Awori, the ministry of Information and Communications Technology, told Daily Monitor yesterday that the government had given the two parties a 14-day ultimatum to settle all the discrepancies arising from the dispute.

In a phone interview, Mr Themba Khumalo, the MTN chief executive officer, said the government had asked them to hold talks with Utl and devise ways through which the debt obligation could be settled.


"We hope Utl meets its end of the bargain so that there are no disruptions in the future," he added.

The move is likely to calm simmering tension arising from a disputed Shs20 billion debt that MTN says Utl owes it.

The money was reportedly accumulated from interconnection charges since 2006.

In a statement yesterday, the government asked the two parties not to take any action that would be prejudicial to the provision of communication services to the general public.

Last week MTN said it would beginning March 14 (yesterday) shut out Utl subscribers from routing its calls through its network.

However, Utl dismissed the Shs20 billion debt claims as an exaggeration with a malicious intent.

Utl said it was only aware of a Shs3.8 billion debt, which had been subjected to the Commercial Court for disposal, adding that it had no plan of remitting any money to MTN before the disposal of the case due for April 28.

The dispute as alleged by Utl is linked to traffic routed through MTN to Southern Sudan, which the firm says was invoiced as local traffic.

Utl said after acquiring permission from the government to host Southern Sudan on Uganda's +256 477 code, it wrote to all telecoms informing them of the development.

It demanded that calls to Southern Sudan be treated as international traffic, which is lowly charged compared to local traffic charged at Shs131.

However, as noted, Utl said MTN had invoiced calls to Southern Sudan as local traffic.

Reacting to the allegation, Mr Khumalo, was yesterday quoted in the press as saying that Utl was only being diversionary adding: "Hiding behind the
disputed amount does not solve the problem."

By Othman Semakula and Isaac Imaka : The Monitor Newspaper

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May 04, 2011
Utl to appeal against MTN?s Shs5b court ruling
by: Anonymous

Wednesday, May 4 2011

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.

Filling appeal
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.

Pending Shs15 billion
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,? Mr 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.

By Walter Wafula: The Monitor News paper

May 04, 2011
UTL ordered to pay MTN sh5b
by: Anonymous

Thursday, 28th April, 2011

THE Commercial Court has ordered Uganda Telecom (UTL) to immediately pay over sh5b to MTN as outstanding interconnection fees plus interest.

Justice Geoffrey Kiryabwire, the head of the Commercial Court, also ordered UTL to pay sh3b to MTN as outstanding interconnection fees plus sh1.5b as interest that was calculated at the rate of 19% per annum from April 2008 to October 2010.

The judge also ordered that delayed payments of the money awarded would attract interest of 19% per annum from yesterday, when the judgment was made until payment in full.

Kiryabwire further ordered UTL to pay MTN general damages amounting to sh100m with interest at 8% per annum from the date of judgment until payment in full.

?I also order UTL to pay the costs of this suit,? Kiryabwire added when delivering the judgment in the presence of the representatives from the two companies.

MTN that was represented by Joseph Matsiko and Paul Kuteesa argued that UTL failed to pay fees accumulated on the Gemtel code.

MTN last month issued a public notice against UTL over a sh20b debt accumulated in unpaid interconnection fees collected from subscribers but not remitted to MTN as per their contract.

UTL, that was represented by Didas Nkurunziza, in its defence said it did not owe MTN any money as the traffic was deemed to be international traffic charged at a different rate.

However, Kiryabwire said traffic originating from MTN to UTL code +256477 is local traffic and not international traffic as claimed by UTL.

By Hillary Nsambu : The New Vision Newspaper

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