Business

INSIDE STORY: Fury as MTN Switches off Africell

Africell headquarters in Kampala

This past Tuesday, see Africell subscribers suddenly realised they could not make calls to MTN.

This was a rare occurrence as Africell’s network is always up to the mark.

Unknown to Africell customers, MTN had acted on a directive from Uganda Communications Commission (UCC), the communications regulatory body.

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The reconnection was made after Africell sought UCC’s intervention.

It all started with a ‘high level security meeting’ which said the process of interconnection should have been concluded by April 1, 2017 in fulfillment of the need to “establish an Intelligent Network Monitoring System” as provided for under Section 5 (u) of the UCC Act, 2013.

On March 15, UCC boss Eng Godfrey Mutabazi wrote to different telecom operators, saying, “notwithstanding the provisions of the individual operator interconnection agreements, the operators should appreciate further that failure to establish the INMS in accordance with the Act has not only led to revenue losses to government on account failure to monitor traffic but has led to declining quality of service.”

Mutabazi further observed that “inability to establish the INMS also poses a security threat to the telecommunications consumers and the security of the nation at large.”

He would later reveal direct that “once the INMS has been fully operationalised, all interconnection services between MTN Uganda Limited and Airtel Uganda Limited and non-compliant networks would be discontinued since the telecommunications companies had agreed to comply with the interconnection deadline of April 1, 2017.”

Mutabazi also demanded immediate compliance with the directive.

Basing on the letter, MTN on Tuesday switched off Africell which was yet to have a system that supports the INMS.

The INMS helps UCC in monitoring of traffic carried by telecom operators’ networks and quality of service; detection of International termination fraud; verification of prepaid and postpaid billing; and substantiation of both incoming and outgoing international traffic.

UCC also intends to use INMS for verification of domestic traffic by all operators with the aim of having a one stop centre for domestic traffic reconciliations.

MTN speaks out

MTN Corporate Affairs boss, Mr Anthony Katamba confirmed to ChimpReports that the telecom had indeed disconnected Africell.

“Yes, we acted within the law. We followed government instructions and switched them off,” said Katamba in an interview with this website on Friday.

Africell protested MTN’s action, taking the matter to UCC.

Mutabazi told us that it’s an old tradition for operators to consult with UCC before taking such action.

“MTN was following that directive but needed to clear with UCC before the action,” said Mutabazi who is attending high level meetings in Geneva.

He said Africell was “in the process of installing the required system” when it was switched off by MTN.

Insiders at Africell accuse MTN of playing a dangerous game in the cutthroat competition which affects customers.

“MTN’s move meant that business and normal transactions couldn’t continue due to this ‘breakdown’”, said an insider who preferred anonymity so as to speak freely.

Upon protest, Africell received a letter from UCC directing MTN to open up the connections to the former.

Africell minders say it’s providing free mobile money services which threaten revenues from MTN’s mobile money transactions.

They further argue that MTN must have been in a panic regarding the ‘Don’t Be Cheated Campaign’, in which Africell appears to thrust a jab at competitors MTN and Airtel.

But Katamba dismissed the allegations, wondered why MTN would take such a drastic measure against Africell whose verified (sim-card registration) are less than 600,000.

He reassured MTN’s professionalism in dealing with other operators in the market.

Figures

According to UCC, MTN has submitted 8.7 million sim-cards for verification of which 8.4m were found to be duly registered with a national identity card.

Africell submitted 1,075,765 sim-cards for verification. Only 564,357 cards were registered with national IDs as of May 12.

The fight between MTN and Africell has exposed the unknown battles and grievances among several operators in the telecom industry.

ChimpReports has learnt that despite repeated warnings to have sim-cards registered, very few operators took the matter seriously.

MTN which boasts 11 million customers managed to have 10 million of its subscribers fully registered.

MTN was also the first to announce that 3.7 million of its unregistered subscribers had been switched off.

This saw MTN lose its market share from 57 percent to 51 percent.

According to MTN officials, they earn an average of $3 from ever customer per month, translating it to $11m lost in switching off 3.7 million unregistered sim-cards.

“This process has dragged on for long because some operators did not take it seriously,” said an official.

“MTN lost money but others who didn’t comply were not penalized. Is this a fair playing ground?” wondered an industry observer.

However, speaking at a press conference on Monday, Mutabazi and Security Minister Lt Gen Henry Tumukunde reiterated government’s commitment to switch off unregistered sim-cards by the May 19 deadline.

“This is a matter that we don’t intend to compromise on, be it in timing or quality. The public has been informed and there should be no excuses,” said Tumukunde.

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