communication between customers of Uganda Telecom and Airtel over a Shs10 billion dispute.

Mr V.G Somasekhar, Airtel’s managing director was summoned by Mr Ruhakana Rugunda the minister of Information and communication technology, to resolve the dispute between the two firms, Daily Monitor learnt.

“As we speak, we are talking to both sides to see that they can come to an understanding so that they don’t switch off customers,” Eng. Godfrey Mutabazi, the executive director Uganda Communications Commission confirmed.
By last evening, it was unclear if an understanding had been reached.

The Bharti Airtel-owend firm had announced that its customers would stop making calls to and receiving calls from their counterparts on Utl with effect from next Monday.

This followed the termination of the interconnect agreement between the two operators on August 15, after Utl failed to pay up to Shs10 billion in outstanding interconnect fees and legal fines to Airtel.

Interconnect fees are charges that operators bill each other for carrying voice calls of their rival customers.
UCC recommends a maximum charge of Shs131 per minute as the interconnect fee.

If implement the suspension of communication between Airtel and Utl is bound to affect at least 4.5 million phone users on both networks.

Yesterday, Mr Dennis Kakonge, Airtel Uganda legal and regulatory director, said Airtel would not lift the suspension until Utl pays at least Shs6.5 billion of the debt.

The tragedy that was only waiting to happen was sparked off by three court cases that Airtel filed against Utl in December last year.

The debts were accumulated between 2008 and last year according to one of the court cases.

Neglected debt

But Utl neglected to pay the money causing Airtel financial loss and damages, a suit filed by Lex Uganda Advocates on behalf of Airtel read in part.

The ailing company in which the Libyan and Uganda government own shares also faced court battles with MTN Uganda over non-payment of interconnect fees.

By January this year, Utl had not paid up to Shs14.7 billion in fees owed to MTN.

The money was accumulated between September 2008 and November 2009, according to the court case MTN filed at the commercial court.

But in March, Mr Stanley Henning, the managing director of Utl denied claims that it owes MTN up to Shs20 billion in fees following claims that the company had published.

The firm, however, confirmed that the two firms were involved in a court battle to iron out their dispute.

“Utl is up to date with interconnect payments to MTN and there is no need for MTN to terminate our interconnect agreement,” he told journalists in Kampala.

Genesis of Utl troubles

Three year disagreement. The Utl , MTN and Airtel interconnection fees battle has been brewing for at least three years. However, it became apparent in March 2010 when MTN and Airtel dragged UTL to the Commercial Court for an alleged combined debt of Shs30 billion accumulated in interconnection fees.

Court records. The two telcoms (MTN and Airtel), according to court documents, demanded for the fulfilment of Utl’s debt obligation or else they seek court intervention to direct on the matter. Airtel and MTN had asked the court to force Utl to settle its debt that had accumulated in a period of about three years.

Intervention. Early this year, the government intervened in the matter and asked the parties involved to settle their grudges amicably. However, the case is still pending full judgment as Utl continues to dispute the amount of money the two telecoms demand from it.

Libyan crisis. At the height of the Libyan crisis, the heat again built on Utl as its debtors raised concern over its ability to clear it’s hugely indebted accounts. Pressure continued to mount on Utl as the United Nations under Resolution 1973 froze all global assets of the Libya government, resulting from a revolt against Col Gaddafi’s despotic regime.

Media piles more pressure. The Media Owners Association reached an agreement then to suspend all forms of advertising for the hugely indebted company creating a new dent on the telecom firm.

Resignations. The crisis at Utl silently continued to brew with major resignations including that of Mr Mark Kaheru, the firms marketing and communications manager.

Coming back again. The issue appeared to have been settled but yesterday Airtel made the first step as it announced that it had decided to sever its interconnection agreement with Utl.

Who owns UTL?

1997. After passing the Communications Act in 1997, Uganda Telecom was churned out of Uganda Posts and Telecommunications Company as an information technology and communication network company.

2000. Uganda Telecom was privatised with the government divesting its 51 per cent shareholding to Ucom, a consortium of Detecon, Telecel International and Orascom Telecom. The government retained 49 per cent ownership in Uganda Telecom. Orascom sold its interest in Ucom to Telecel between 2002 and 2003.

2007. LAP Green, a subsidiary of the Libya African Investment Portfolio, a company owned by the government Libya, bought into Ucom, while Detecon sold its interest to Telecel International. The new shareholding structure in Uganda Telecom, left the Ugandan government with a 31 per cent ownership, while Ucom’s shareholding increased to 69 per cent.

As of June 2011. Uganda Telecom was still registered as a joint venture between LAP Green, with 69 per cent and the government, with 31 per cent.

This article originally appeared in the Daily monitor

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