MTN pays Shs372bn for new operating licence for next 12 years

Telecom giants, MTN Uganda has announced the renewal of their operating licence for 12 years after paying $100m( about shs372 bn).

“MTN Uganda is now pleased to announce the conclusion of negotiations for the renewal of its second national operator license which expired in October 2018,” the company announced on Saturday.

“MTN has fulfilled all conditions precedent to the license, including the payment of a total sum of US$100 million as license renewal fee for 12 years commencing 1 July 2020.”

MTN joined the Ugandan market in 1998 and its 20-year licence expired in 2018 but throughout this period, the company has seen protracted negotiation efforts to have the licence renewed.

Last year, President Museveni said the company needs to sell shares on the local stock exchange to facilitate domestic ownership of the company and ensure more of the money it earns stays in the country.

“It is important that you float shares on the local stock exchange to allow for local ownership,” Museveni said while meeting MTN Group’s President and CEO Rob Shuter on the sidelines of the World Economic Forum in Davos in 2019.

Since 2018 when the company’s licence expired, it has been operating on provisional licences of six months each as officials engaged in protracted negotiations with the government to ensure the licence is renewed.

In 2018, President Museveni directed UCC and the Ministry of ICT to explain why MTN’s licence had been reduced to $58m from $100m that had been agreed on by Cabinet.

“You ought to be aware that over the 20-year span during which MTN has been operating in Uganda, it has reaped vast profits most of which have obviously been repatriated. This is common knowledge derived from the company’s declarations and our own sources,” Museveni wrote on October 28, 2018.

He explained that the hike in licence fees was premised on projected annual gross revenues of the telecom, which put into consideration growing populations.

Consequently, negotiations for the new licence kicked off and early this year, the government said the telecom company had agreed to pay the shs372 billion for the new licence.

MTN Uganda Chief Executive Officer, Wim Vanhelleputte on Saturday applauded President Museveni, the Ministry of ICT and Uganda Communications officials for their efforts in seeing the negotiations bear fruit.

“MTN Uganda and the Commission will conclude the signature of the License Agreement within the coming days,” the telecom company said.