MTN loses Shs50.7 billion licence case against UCC

Wednesday April 28 2021

MTN had been challenging a levy that was instituted by UCC as transitional licence charge from October 21, 2018 and June 30, 2020. PHOTO/FILE

By Juliet Kigongo

Court has dismissed with costs, a case in which MTN was challenging the legality of the Uganda Communications Commission (UCC) directive to pay $14.14m (more than Shs50.7b) as transition licence fee for the three year transitional period.

High Court Judge Musa Ssekaana ruled that there was no impropriety in UCC’s decision to impose transition fees based on a pro-rated assessment and that the same was fairly arrived at and guided by the amount paid for of $100m in the currently renewed licence.

“…it has been shown that the respondent (UCC) arrived at the amount payable as transition fees in the fairest manner and no reasonable person would think otherwise. Otherwise, any amount beyond what was agreed and paid for in the (National Operator) NTO licence would have been challenged as being excessive and using the figure originally paid in Second National Operator (SNO) licence in 1998 would have been irrational since it would be extremely low,” he ruled.

Justice Ssekaana ruled that UCC has specialised knowledge of the telecoms sector and therefore applied it to arrive at the decision whereby it would not be rational for court to substitute its decision with another. 

The court decision resulted from a case in which MTN had challenged a decision by UCC to levy transitional fees. 
The telecom had cited the levy as illegal and not derived from the law, arguing that at the time of the demand for transition licence fees, no legal or regulatory framework for determination of the fees for had been established.

Therefore, court ruled that indeed UCC had powers under Section 6(1)(a) of the Uganda Communications Act, noting that the determination and charging of licence fees is one of the operational administrative powers exercisable by UCC under Sections 5 (1)(a)(b) and (z) and 6 of the Uganda Communications Act 2013.


“It is accordingly untenable for the Applicant to argue that there is no legal framework and no law under which the fees were levied. There is no requirement in the law that provides that the actual amount payable shall be determined by way of a statutory instrument,” Justice Sekana ruled.     

He also reasoned that at all material times during the transitional period when MTN’s operations were being temporarily extended, the company was fully aware that an appropriate licence fee for the extensions would have to be paid at a later date because this was an express provision in the authorisations, which it accepted.

“It is disingenuous to now turn around and argue that the fee is illegal because it is retrospectively being applied. There is no law that prevents payment or ascertainment of payment in arrears for a licence one has used for private gain. If the Applicant did not want to pay fees after consuming a service it should have declined the extensions,” Justice Sekana ruled.

The case

According to court, MTN had sought to quash a decision in which UCC had directed MTN to pay $14.14m as licence fees for the transition period. 
The telecom had also sought an order restraining UCC from implementing its decision and in any way interfering with or interrupting with its operations by reason of its decision as well as prohibiting UCC from unilaterally determining and levying the licence fees for the transition period which are not prescribed by law.

Through its lawyers, MTN had also asked court to declare that any licence fee for the transition period should be determined with reference to the company’s Second National Operator (SNO) licence.’
In the letter dated July 22, 2020, UCC directed MTN to pay a licence fee for the transitional period between October 21, 2018 and June 30, 2020 worth $14.14m.