By Otim Nape
Millions of Ugandans are in the happy mood and praying for the worst after regulator UCC refuses to automatically renew MTN Uganda’s telecom operational license. Reliable industry sources have revealed that every telecom must renew its license every 10 years and that the license for MTN was last renewed in 2007.

Since the year 2007, many things have changed and millions of unhappy Ugandans are every day
reporting complaints to UCC calling for tough action against MTN for cheating them and engaging in many other exploitative and unethical practices. Besigye’s PA Muhinda Ronald is one of the Ugandans praying
to see that UCC doesn’t renew MTN’s license. Muhinda has been making noise accusing MTN of cheating him on his MBs and daily bundles which he buys and they are chopped instantly. Many other Ugandans are
unhappy with MTN following claims that it aids spying on their phone calls by security agencies mostly during campaign time. In the past, the FDC party which has millions of members and supporters publicly burnt millions of MTN lines accusing the giant telecom of encouraging the security apparatus to spy on them. Since that time big people in FDC like Kizza Besigye have never owned an MTN line. Besigye uses only airtel line which starts with 0752. He keeps saying airtel is safer compared to MTN, the very reason he doesn’t use it. Other Ugandans who aren’t in politics at all accuse MTN of exploiting them by charging them much more on phone calls they make than airtel which gives them many free calls under its offers like pakalast, mega corporate bonus etc. When it comes to lending airtime, still majority Ugandans are for airtel because until recently the maximum MTN would lend was airtime for 1,500.
PROFIT REPATRIATION
On a more serious note, Ugandans have also been complaining to UCC on the issue of profit repatriation. The South African telecom giant repatriates 600bn back home every 6 months and whereas this isn’t against the law, it’s something that annoys many Ugandans seeing MTN as milking the cow without feeding it.  This means in a whole year, they repatriate 1.2trillion shillings leaving Uganda’s economy bleeding yet they make all this money from this same market where they are ever busy exploiting the poor. Customers in Uganda have rewarded mostly airtel by migrating there and spending much on Airtel airtime because it often comes with generous bonus packages.  The latest UCC statistics show that MTN has 18,048,353 registered subscribers and it’s closely followed by the pro-people Airtel at 10,076,051. Africell is in number three with 3,588,583 registered subscribers. UTL is number 4, Smart telecom number 5 with 113,595 subscribers followed by K2 telecom, Vodafone with 62,998 and Smile with 19,809 and Tangarine with 2,722 subscribers.  UTL is number 4 because it had management problems, Aga Khan’s Smart is number 5 because the market has rejected them, Vodafone in number 7 because its generally a new entrant and K2 is in number 6 because of the exploitation by the Lebanese who own Africell and this is a story we shall be exposing in details in the coming days. In fact for MTN, Uganda is one of the best markets because the government has been allowing them to charge customers the way they want and to repatriate the profits the way they want even when this is clearly contrary to what the people want. When it comes to top jobs and managerial positions, most of them are given to expatriates from South Africa and other countries as if there are no indigenous Ugandans who went to school.  The biggest Ugandan in MTN is Chief Technical Officer Goodian Kyomukama and the rest (CEO, CFO, CMO, Sales head etc) are foreign expatriates earning salary in dollars. Reliable sources show that one of the reasons why the government wants to revamp Utl is to make sure MTN’s practice of repatriating more than 1trillion per year back to South Africa is stopped. When Utl becomes the leading telecom, then MTN will finally be eliminated and forced out of this market because they are just exploiting and they don’t care the way Ugandans suffer. The public says MTN has the worst customer care and sometimes the company blames this on the large customer base which overwhelms them.

Table showing market share for different telecom companies operating in the Ugandan market

MTN LOSES TO AIRTEL
Because customers are ever running away from the MTN because of the way the South African telecom exploits them and cheats on their MBs, Airtel has progressed very well. Its customer base has grown
especially on voice calls and MTN is now very scared of Airtel and other upcoming players. Because of the bonus packages it has, Airtel today has the highest number of registered telephone lines that are used for voice communication which is the same as traditional phone calls. Most Ugandans use their airtel lines (both 070 and 075…) to make and receive phone calls than they use their MTN lines. This has resulted in Airtel boasting of the highest number of active lines when it comes to voice calls and revenue made thereof. Airtel is also doing well on data sales because customers rightly realize that Airtel data or MBs is cheaper and faster when using internet than the MTN service which is slow and keeps chopping people’s MBs. MTN is again more costly for customers who use money mobile to pay bills like TV charges, water and electricity utility bills. Having lost out to Airtel which customers say isn’t exploiting like the MTN, the South African telecom giant has concentrated on mobile money transactions and this is the only safest area they still have to properly beat Airtel. Indeed one of the industry sources we interviewed said most of the registered active subscriber lines registered on MTN are only used for mobile money transactions and a little bit of internet/data business otherwise those MTN lines would be totally idle by now because of MTN’s very exploitative charges. Reliable sources say UCC will take some good time reviewing the complaints from the public before deciding to renew MTN’s license for another 10 years or not. As per now, MTN is on air but with no valid license because what they got in 2007 has already expired.  In the meantime, the public eagerly awaits the UCC final decision but millions of them will be happy and they will appreciate UCC boss Godfrey Mutabazi more if he shocks the public by not renewing MTN license or renew it with very strict conditions being given out to ensure the public exploitation stops. As for the FDC, they dislike MTN so much that even when they are fundraising they mostly give the public Airtel lines and they are ever discouraging MTN lines.
MTN IN OTHER EAC PLACES
In the East African region, Kenya is the biggest economy but MTN makes more money in Uganda than Kenya. This is because Kenya licensed them to only offer internet services. Kenya has only 3 mobile telecom operators and denied MTN the license on grounds they can’t afford a 4th operator.
VERY STRANGE SITUATION; knowledgeable telecom industry sources said it’s very strange and awkward that a big player like MTN can wake up one day when they have no valid license. “It simply means that behind the scenes, there has been a lot of issues of disagreement with UCC concerning their non compliance otherwise their license would have been renewed months earlier before the current one expires” explained a source adding that “even as of now they shouldn’t be on air except if the regulator gave them an interim license which can’t be more than 3 months”. The source added that when UCC is giving you the license to operate as a telecom operator, it comes with obligations which you must fulfill or else your license is revoked or not renewed once it expires. The licensing obligations are in the areas like making sure the service is good and satisfying to the customers and to ensure the area you were licensed to cover is getting the service. The license also comes with certain financial obligations and UCC receives quarterly reports showing compliance in each of the license obligation areas. Sources say there are many issues and unanswered questions concerning the quality and authenticity of the quarterly reports MTN has been submitting to UCC. Every telecom operator is obligated to surrender 2% of their gross income which UCC uses to capitalize the Rural Communications Development Fund (RCDF) which aims at deepening access to internet in rural areas. “UCC is allowed by the law to refuse to renew your license as a telecom if there are many service complaints from the public and customers which seems to be the case for MTN. This must be the reason their license wasn’t renewed by UCC before the current one expires and if the law was to be strictly followed without any political interference, UCC should switch them off now unless Mr. Mutabazi gives them some interim license which can’t exceed three months. Any Ugandan can now go to court and get a court order for MTN to close shop” the source added. Speaking separately, a source in UCC confirmed that MTN has been losing ground to Airtel especially for traditional voice calls. Whereas Airtel is now the biggest on voice revenue, MTN is mostly thriving on social media calls and data sales but mostly mobile money. It’s a public secret that the traditional voice calls will be totally phased out in the period of three years from now. By that time everyone will be calling using skype, facebook, whatsapp and other social media platforms using the internet.

MTN CEO Brian Gouldie

SELFISH SOUTH AFRICANS: MTN’s other problem why Ugandans feel they haven’t benefited much for the very many years it has operated in this market, concerns staffing and the composition of its top most
management. The biggest position a Ugandan holds there is Chief Technical Officer Goodian Kyomukama who by now should be the CEO or something like that because he is hard working, honest and has accumulated enough experience.  As per now, the MTN CEO, CFO, CMO and head of sales are all foreign expatriates paid in dollars yet we have Ugandans who are even more qualified and can do the job better. UMEME and Stanbic Bank have set the example that a Ugandan can be CEO and do a good job in those big companies. At MTN, the story is different.
Ugandans can only serve in subordinate positions. “They have operated in this market long enough and by now Ugandans should have been trained and trusted to steer the company from the very top but deliberately that isn’t happening because the South Africans’ deliberate approach is to exploit the economy without growing it” said the telecom industry source. In the board there is Charles Mbire whose voting rights can’t equal that of the South Africans when it comes to making big decisions. Mbire is a former PA to Gen Salim Saleh which could explain the mileage and connections his involvement has had for MTN. But as per now, UCC is determined to enforce the law whether MTN likes it or not. The fact that the license had to expire to the last day without another one, and UCC continues saying we are still reviewing, is an indicator that all isn’t well between the regulator and MTN. MTN mostly repatriates profits in hundreds of billions (they take in dollars) which drains our economy dry. The only money they invest here goes into network-related investments e.g. fiber. They also invest a very negligible small fraction of their money in CSR for example the MTN marathon. They haven’t invested in anything else outside things concerning network improvement. Their repatriation of profits is the reason our economy is ever diluted and facing scarcity of dollars. UCC is also concerned that MTN is looking at only profits and can’t show any sense of responsibility to ensure Uganda’s sustainability as required of them as a corporate citizen. The UCC source gave the example of MTN refusing to invest in network infrastructure in some parts of Uganda because people there are too poor and can’t afford telecom services even though there is potential of them affording it in future. MTN and other telecoms have a duty to support such communities to grow economically and start consuming their telecom services. This is another reason M7’s government wants to revive UTL because that is the Uganda owned telecom which can make such investments in areas which aren’t immediately profitable. “MTN  has a lot of capacity but they can only invest putting up a mast in an area after seeing there are people to start using their services yet in some cases, you have to be patient and invest in long term prospects” the UCC source added. In the East African region, MTN operates in Rwanda, Uganda and Kenya which limits them to only data services and not telecom. Uganda permits them to repatriate profits and to employ the expatriates the way they like and this is one reason they make serious super normal profits in Uganda. They considered the Tanzanian market but abandoned the idea after seeing the government was very strict and protectionist of its citizens against telecoms that come to exploit them. Uganda is one market they entered early which also partly answers the question why it’s their best performing market.

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