In Summary

Engaging extensively. In notes published along MTN’s financials, the telecom said it is engaging government over recent developments in the market.

MTN has said it is “extensively” engaging government on a number of market developments, key among them licence renewal.
In notes published along the telecom’s financials last Thursday, Mr Rob Shuter, the MTN Group chief executive officer, said without giving details that they were “engaging extensively with the authorities in Uganda over recent developments in the market”.

“MTN Uganda was granted an extension of [our] existing operating licence to allow for the conclusion of negotiations around the terms for the licence renewal,” he said.

Daily Monitor could not get a comment on particulars of the engagement as calls to Ms Justina Ntabgoba, the MTN senior manager corporate affairs, were not successful.

However, the telecom has been battling a number of issues, key among them delayed renewal of its licence, deportation of key staff, listing on the Uganda Securities Exchange and claims of falsified or under declaration of call volumes with the view of dodging taxes.

In meeting on the sidelines of the World Economic Forum in Davos, Switzerland, President Museveni said he had told Mr Shuter that telecoms should not under declare call volumes to cheat “our government of revenue”, adding that government had imported machines to track calls.

The President has also previously asked Uganda Communications Commission (UCC) to explain why it had reduced MTN’s licence renewal fees from $100m to $58m.

However, the telecom has previously denied under declaring call volumes.

Mr Godfrey Mutabazi, the UCC executive director, at the weekend told Daily Monitor the discussions, especially surrounding the licence renewal, were going on smoothly.
“We are moving on well. We haven’t had any challenges with MTN, especially in regard to [its] licence and operations,” he said.

Government, has on two occasions, since the expiry of MTN’s 20-year licence in August last year, granted partial renewals with the most recent being a three-month renewal in January.

Mr Mutabazi also noted that government was conducting investigations on MTN to find out if it had breached any operating guidelines.

However, he said, until investigation are concluded, there has been no conclusive findings in regard to claims such as under declaring call volumes and tax avoidance.

The MTN Group also published its financials for the year ended December 2018 with Uganda contributing Shs1.3 trillion in revenue, which represented a 4 per cent contribution to the telecom’s gross bottom line.

According to details published in the financial report, the telecom generated Shs735.7b from outgoing voice calls while Shs86.1b was pooled from incoming calls.

Data, one of the new revenue streams in the telecommunications sector, generated Shs156.4b while digital services pooled Shs2.5b.

Fintech, which includes Momo Pay, a payment platform for MTN mobile money subscribers, contributed Shs339.3b.
Short message service (SMS) and sales from assorted devices pooled Shs24.3b and Shs13.3b, respectively while Shs19.7b and Shs13.3b was generated from others and wholesale segments, respectively.

MTN, whose mobile penetration, according to the report stands at 54 per cent, remains the leading telecom in Uganda with 46 per cent market share, according to Uganda Communications Commission.

The telecom currently has 5.4 million data users, with 2.2 million accessing the Internet through smartphones.

The MTN Group registered a profit after tax of Shs2.4 trillion from Shs1.1 trillion in 2017 from its operations in 20 markets for the years ended December 2018.

According to the financials, the telecom, which has more than 232.6 million subscribers in 20 markets, saw its revenues increase by 10.2 per cent, raising to Shs34.5 trillion from Shs34 trillion in 2017, driven by good performance in the Nigeria and Ghana markets.

The MTN franchises in Cameroon and Ivory Coast, however, posted a 7.3 per cent and 6.6 per cent decline in service revenue, respectively. The report also indicates a 7.3 per cent growth in the voice segment while data revenues increased by 22 per cent in the period.

Revenue from Fintechs grew by 46.8 per cent while digital declined 32.9 per cent.