UTL and Airtel in costly interconnection feud

Uganda Telecom, UTL Offices

Two of Uganda’s carriers UTL and Airtel have for sometime been having a dispute over outstanding interconnection fees worth over UGX 6.3 billion. The big red teleco sued UTL, seeking payment of over UGX 6.3b, which Uganda’s oldest telecom had deliberately refused or failed to pay. In 2012, Airtel and Uganda telecom entered an agreement that saw allowed subscribers from both telecoms to communicate among each other, but by the end of 2014, UTL failed to pay the amassed money.

According to the Daily Monitor, which received some of these court documents, Airtel said the “amounts due for payment are arrived at by exchange of respective traffic reports showing traffic terminated at each other’s telecommunications system. Some payments were indeed made and no dispute arose in respect to the amounts reached upon the reconciliation exercises or for the balances agreed and known to owe,” the petition said, highlighting the amounts under dispute”

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All in all, the struggling telecom’s efforts to pay back Airtel were nugatory irrespective of the countless invoices they had been issued rendering the agreement between the two carriers useless. Airtel’s petition breaks down the monies owed as shown in the table below.

 Monies owed to Airtel in millions (UGX)
Local tariffs3600
International Traffic 586.4
Agreed Interst on local interconnection fees2100
Agreed Interest on Int interconnection fees190
E1 (transmission capacity) fees800.4

In the petition, Airtel Uganda indicated that it on several occasions nudged UTL to pay up but in vain. The court has given UTL 10 days to defend itself or Airtel would be entitled to the amount claimed.

The UTL pattern

UTL has had similar wrangles with other telecos like MTN in a $2.2 million dispute over interconnection fees. Former employees of the company also sued the company and NSSF over mishandling their retirement benefit scheme and the telecom regulator recently issued an audited report that indicated that UTL’s liabilities exceed its assets. In 2015, UTL was dragged to parliament by former UTCEL employees on similar grounds.