Telecom giant MTN Uganda has agreed to pay $100m (about Shs370b) to the government for renewal of its license, ending a standoff that attracted the attention of the President.
MTN Uganda had wanted the fees reduced, considering the infrastructure investment needed to meet the demands of the new broadband policy.
Former UCC Executive Director Godfrey Mutabazi defended the lowering of the fees, arguing that, in the long term, making telcos spend a lot on taxes would lead them to underhandedly charge a lot of money from Ugandans to regain the money.
Ibrahim Bosa, the UCC spokesperson, told reporters that MTN Uganda would pay the funds in installments.
In a follow-up interview, Fred Otunnu, director of corporate affairs at UCC, confirmed the development.
The license will be renewed for 10 years. Its previous license, which lasted for 20 years — expired in October 2018.
UCC has been granting MTN temporary extensions during the negotiations.
According to the new telecom licensing framework and regulations, national telecom operators will be required to pay either 2 per cent of their gross annual revenues or pay $100m for a 10-year licence.
President Museveni on October 28, 2018, wrote to UCC, questioning their decision to allow MTN to pay $58m as licence fees despite Cabinet agreeing on $100m.
“You ought to be aware that over the 20-year span during which MTN has been operating in Uganda, it has reaped vast profits most of which have obviously been repatriated. This is common knowledge derived from the company’s own declarations and from our own sources,” the President wrote.
The government explained that the hike in licence fees was premised on projected annual gross revenues of the telecom, which put into consideration growing populations.
