How MTN Uganda ended three-year license tussle with government

MTN Group CEO Rob Shuter with the Ugandan President Yoweri Kaguta Museveni in Davos, Switzerland. (PPU PHOTO) KAMPALA — Telecommunications giant MTN has confirmed that it will list 20 percent of its shares on the Uganda Securities Exchange, and pay $100 million in blanket taxes as part of the conditions for it to be issued with a long-term license by government.

This comes after a three-year-long tussle between Africa’s biggest network operator and the Ugandan government.

This website understands that the tax fee will be paid in two instalments of $50 million each to the Uganda Revenue Authority.

The first payment was expected to come on Monday March 1, 2020. We couldn’t independently verify whether MTN Ugandan actually paid the money to URA as greed between them and government but we understand the next will be received in April or before the end of the financial year.

State Minister for ICT Peter Ogwang confirmed the reports on Friday while providing the basis for the issuance of an unusually long-term license.

“It is true that MTN agreed to pay the $100 million in return for a license for 14 years. As a government, we had wanted to give them 10 years but they explained that they have to invest in infrastructure upgrades and that their investment plan will see them injecting an extra $260 million over the period so we agreed on 14 years,” he said.

“They also agreed to start the process of public listing which requires them to list at least 20 percent of the company shares within the first two years of licensing,” a source told The EastAfrican .

The newly-acquired National Telecom License will take effect from June 30, after which MTN will then have full geographical access coverage of Uganda. The company will also be able to improve the quality of telecommunication services and boost investment in the sector for both existing and new telecom operators.

Over the years, there have been constant clashes between government and MTN, which was accused of under-declaring its revenue and cheating the state on tax collections.

There were also allegations that the telecom company hired spies of the Rwandan government, undermining Uganda’s national security. This triggered the deportation of four top executives at MTN Uganda, including a Rwandan national last year.

According to a government spokesman, Ofwono Opondo, authorities are not after disintegrating MTN’s business but seek to fetch out the bad elements who are using the company’s system […]

Stay in the Know!

Sign up for the latest news and information on African Companies and Economy.

By signing up, you agree to receive MoneyInAfrica offers, promotions and other commercial messages. You may unsubscribe at any time.

Leave a Reply