MTN Uganda goes to court over interconnection rates

Uganda's largest mobile telephone operator, Mobile Telephone Networks (MTN) has taken the industry regulator, Uganda Communications Commission (UCC), to court over plans to fix interconnection rates.

In April this year, the UCC announced that it would come in to regulate interconnection fees that players in the mobile telecom sector pay when they carry each other's call traffic. A fixed interconnection rate is international practice, which the Ugandan market had yet to adopt.

Today, every one of the five players in the Uganda market charges a high interconnection fee to maximize profit.

In the suit, which was filed at the Kampala High Court, MTN wants a declaration that UCC has no legal authority to fix telephone interconnection rates among telephone operators. MTN Uganda wants a permanent injunction restraining the management of UCC from fixing the interconnection rates.

MTN claims that on Dec. 7, the UCC fixed telephone interconnection rates at US$ 0.066 for mobile and fixed termination near end; $0.063 for fixed termination far end; $0.013 for transit; $0.007 for SMS termination; and wholesale leased line charges at a retail rate of less 20 percent.

"By law fixing telephone interconnection rates between telephone operators is a matter of negotiations and agreement and as such UCC's decision shall have effect of re-writing the said agreement contrary to the law and public policy," the complaint reads in part.

The move to regulate interconnection charges was informed by a consultation study on interconnection, retail costs and pricing that was undertaken by PricewaterhouseCoopers London on behalf of the UCC early in the year.

New mobile competitors coming into the Uganda market have in the past been critical of the existing policy of leaving the issue of interconnection to the players themselves. The new interconnection regime aims to provide users with the widest possible choices of quality service at the most competitive prices and gives policy makers and regulators opportunities to foster and enhance universal service/access initiatives. It also requires network operators and service providers to perform their competitive/complementary activities in an orderly manner and with due regard to public interest.