Court orders UTL to pay MTN Shs6b interconnection fees

A UTL business centre in Kampala. The telecom firm has been ordered to pay Shs4.9 billion to MTN accruing from interconnection fees. FILE PHOTO

What you need to know:

Deal. The two companies had entered an agreement to use each other’s network.

Court has ordered Uganda Telecom Limited (UTL) to pay its competitor, MTN Uganda Limited, more than Shs6 billion to settle an interconnection bill for the period from March to December 2007.

The Court of Appeal justices, Remmy Kasule, Rubby Aweri Opio and Richard Buteera, made the order while dismissing an appeal by UTL to uphold a High Court order in which UTL will pay interest on the said money, charges for delayed payments at 19 per cent and damages worth Shs100 million with interest at 8 per cent.
“Having found that the grounds of appeal have all failed, we hereby dismiss the appeal with costs and also those of the court below to the respondent,” the judges unanimously held.

Court documents indicate that in February 2008, MTN invoiced UTL for Shs6 billion as interconnection fees but they later paid Shs3 billion contending that the balance was not due to them, leading to the court case.

MTN, through their lawyers Kampala Associated Advocates, argued that the said arose as a result of applying the domestic rate of Shs100 to the telephone traffic exchange between UTL and MTN for telephone traffic originating from and terminating on code +256 6477 XXX.

Documents indicate that the money arose out of interconnection with Gemtel, telecommunications operator in South Sudan. Court held that the network for utl and Gemtel was one because the code was for local traffic.

The Court of Appeal held that the Ugandan minister in charge of Telecommunications did not issue guidelines in accordance with the request by the government of South Sudan for use of the Uganda code +256 by Gemtel Limited, a communications company licensed to operate in the country. Court also heard that the telephone traffic that terminated on UTL’s own network of +256 477 xxx was local as its network which had been allocated to Gemtel for use in South Sudan.

The agreement
MTN and UTL agreed to an interconnection agreement effective February 1, 2001 through which the two companies were obliged to pay each other interconnection fees for traffic terminating in each other’s network, or originating from one’s network and transiting the other’s network.


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