Uganda - attempt to set MTRs delayed on appeal

[daily monitor] The High Court has temporarily blocked the Uganda Communications Commission from implementing uniform call termination rates for all telecommunications companies meant to take effect on January 1, 2010.Termination rates are the charges the telecommunication operators charge each other to enable subscribers call various networks.

UCC, which is the regulatory and licensing body, has been barred from fixing telephone interconnect rates at Shs131 for mobile and Shs125 for fixed phone besides the SMS rates at Shs15 and Shs25.

Currently, the telecommunication companies charge themselves between Shs100 and Shs181 depending on the outcome of mutual negotiations. These charges are invariably transferred to customers of different networks.
Justice Kibuuka Musoke on December 18 blocked UCC from implementing the new rates, saying it should not be imposed on MTN before it’s determined whether the communications body has the authority to impose its rate on the operator.

The judge said: “The applicant has shown that there is a substantial ground for investigation to determine the legality of this matter.” UCC had set a ceiling for interconnection fees between telephone operators within which operators can negotiate and reach an interconnection agreement. But MTN Uganda argued that the commission’s plan was illegal. “UCC has no powers to impose interconnect rates between MTN and the other telecom operators if they have not failed to agree to an interconnect rate…,” MTN lawyers said in an application sent to the High Court.

Illegality Vs fairness
MTN claims that UCC can only intervene in the rates, if there has been a dispute between operators which it says has not happened. But UCC argues in its submission that “there was evidence of difficulties” in relation to the process of negotiating interconnection agreements, in particular, the rates that would be applicable. The regulator claims that the objective of setting the uniform rates for all the players is to ensure “fairness” and lead to lower cost of communications.

UCC argued that MTN, using their own cost model, asserts that the true cost of interconnection ranges between Sh136 and Shs138 however, they continue to charge up to Shs181 for new telecommunication companies. This according to UCC will lead to “significant loss of revenue” to UCC as well as being an overcharge to other telecommunication operators.

The court order will remain in place until the main application filed by MTN for judicial review at the Kampala High Court is disposed of. In the meantime, telecommunication companies will continue to charge up to Shs181 for interconnectivity. Another hearing on the case is due on February 17, 2010.

High Court blocks telecoms regulator from imposing rates