In his decision delivered electronically justice Musa Ssekaana ruled that there was no procedural impropriety in the decision made by UCC in imposing transition fees based on a pro-rated assessment.
High Court in Kampala has upheld a decision by Uganda Communications Commission -UCC for telecom company MTN to pay 51 billion Shillings (14.14 million USD) as license fees.
In July 2020, UCC wrote to MTN requiring
them to pay a license fee for the transitional period of 21st October 2018 to
30th June 2020. This is a period during which MTN didn't have a running telecom license, as it had expired in October 2018.
In October 2017, MTN applied to UCC for a renewal of
its Second National Operator license which was due for expiry in October 2018.
UCC determined that the renewal fees for the applicant license would be USD 58
million for the telecom company to continue operating under the Second National
Operator license terms and conditions.
However, in November 2017, UCC deferred the issuance
of the renewed license to allow for the alignment with internal government
processes. It extended MTN’s operations of the license for a maximum period of
60 days from 21st November 2018.
The period was further extended on 21st March 2019
to ensure continuity while negotiations over the new license progressed. Further
extensions were made until 30th June 2020.
Court records indicate that on 18th March 2020, the UCC
communicated its decision to renew the license for a term of 12 years from 1st
July 2020.
In the letter, UCC indicated that MTN would be
required to pay license fees for the transition period between 2018 and 30th
June 2020. Consequently, in July 2020, UCC issued a demand requiring the
applicant to pay a license fee worth over Shillings 51 billion for the
transition period from 21st October 2018 and 30th June 2020.
In response, MTN wrote disagreeing with the premise
on which the regulator had assessed the fees payable. It then ran to court
seeking an injunction restraining UCC from implementing its decision and in any
way interfering with or interrupting MTN operations.
In its application, MTN asked court to prohibit UCC
from unilaterally determining and levying the license fees for the transition
period saying they are not prescribed by law. MTN wanted any license fee for the
transition period to be determined with reference to its Second National
Operator (SNO) license.
In defense, UCC argued that the figure was
reached at after consultation and a directive from the president was issued to that
effect. According to UCC, MTN had been asked to sign for a new license for 14
years including the two years of transition from 2018 to 2020.
However, MTN
refused the 14 years and decided to sign for 12 years on an understanding that
a separate fee of Shillings 51 billion was to be paid on a prorate basis for
the transition period.
In his decision delivered electronically justice
Musa Ssekaana ruled that there was no procedural impropriety in the decision
made by UCC in imposing transition fees based on a pro-rated assessment.
He adds that the fee was fairly arrived at and
guided by the amount paid for of US$100 million a year. “In the final analysis,
I find no merit in this application and the same is dismissed with costs to the
respondent,” ordered Justice Ssekaana
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