• Business - Companies
  • Updated: December 18, 2020

Airtel Trumps, Outrival MTN In Uganda Licence Deal

Airtel Trumps, Outrival MTN In Uganda Licence Deal

(Photo Credit: Business Elites Africa)

Airtel Africa has renewed its operational licence in Uganda after a period of negotiation which led to the company paying less than its rival, MTN, and receiving more timeframe for the duration of the licence. Airtel Africa paid $74.6 million before it was issued the National Telecom Operator Licence in Uganda.

AllNews gathered that the $74.6 million includes value-added tax (VAT) of $11.4 million. The payment is for a new licence regime, which will last for 20-years. While commenting on the finalisation of the licence renewal, Airtel said it will "retain all its current spectrum subject to the law and terms of assignment."

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Adding that, "the scope of services will be the provision of basic telecommunication services, infrastructure services, and value-added telecommunication services.  In addition, Airtel Uganda commits to achieving coverage of 90% of the geographical boundary of Uganda within five years of the effective date of the licence – with a minimum obligation of providing voice and data services." a statement seen by AllNews disclosed.

MTN Paid More For Less

Meanwhile, AllNews findings showed that MTN had paid $100 million as license renewal fee for a period of 12 years, commencing on same date as that of Airtel, July 1, 2020. MTN renewal negotiations had taken two years before the licence was issued to the company.

MTN's service licence had expired in October 2018, with the company having to use a temporary licence which it renews every six months at an undisclosed amount. It was gathered that MTN and Ugandan government were at loggerheads over renewal fee of a new licence regime.

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The confrontation led to Uganda authorities deporting about four directors of MTN, including the telecoms Chief Executive Officer, Wim Vanhelleputte. Other directors deported are the company’s chief marketing officer, Olivier Prentout and Annie Bilenge Tabura. The deportation occurred early February 2019. The CEO was allowed into Uganda three months later.

Ugandan government had also rejected $50 million offered by MTN for a new licence regime. The confrontation lasted for about seven months before MTN announced in June 2020 that it has reached an agreement with the Ugandan government.

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