UCC at Risk of Losing More Than UGX2bn Due to Smile’s Discontinued Service Offering
UCC failed to recover UGX2 billion from Smile Telecom it owed to the Government before its exit from Uganda’s market.
A report that was presented by Auditor General John Muwanga in December 2022 has queried and faulted the Uganda Communications Commission (UCC) for its failure to recover UGX 2.083 billion from Smile Telecommunications Limited that it owed to the government before its exit from Uganda’s market.
According to the Uganda Communications (fees and fines) Amendment Regulations 2020, an operator who, without authority from the Commission discontinues its services licensed by the Commission is liable to a fine of up to 10% of the Gross Annual Revenue of the operator.
The report reveals that the telecom discontinued its operations in January 2022 without any authorization from the Commission, and UCC did not suspend or revoke the license as guided by the Act. The report further reveals that the Commission did not find Smile Telecommunications Limited in violation of the terms and conditions of the issued license.
In response to the report, UCC revealed that Smile had applied for a regional PSP license and a National PIP license but changed to a regional PIP and regional PSP, noting that the process is still ongoing.
Smile discontinued its operations after service was disconnected by the American Tower Company (ATC) due to its failure to pay accumulated tower carriage fees.
At the moment, Smile and ATC are involved in a court battle where the telecom says it faced irregular and unfair treatment from the Tower Company.
PC Tech Magazine has learned that the telecom has been plagued by financial woes and challenges following a dispute between two of its shareholders. We have also learned that the shareholders have agreed on a refinancing plan that will see a commitment of USD$51 million (approx. UGX187,221,306,000) in fresh capital.
Will the fresh capital see the resurgence of Telecom? This will greatly depend on the approval and granting of their license, and how their wrangle with ATC is resolved.