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Kampala - Uganda's largest mobile firm and a unit of MTN Group [JSE:MTN], MTN Uganda, said on Wednesday it would stop carrying calls from fourth largest operator Uganda Telecom over unpaid fees, but the smaller rival said it was disputing the amount in court.
MTN Uganda threatened to stop its interconnectivity service to Uganda Telecom on March 14 over its failure to pay 20 billion shillings ($8.39 million) in interconnection fees.
UTL, majority owned by Libya's flagship Africa investment vehicle, LAP Green, accumulated the debt over the last three years and several attempts to secure payment have been fruitless, MTN Uganda said in a statement.
"Uganda Telecom Limited has unjustifiably and persistently refused to honour their business obligation and attempts to resolve the matter of outstanding unpaid dues, thus forcing us to take this unavoidable step," the company said.
MTN Uganda said continuing its agreement with UTL was "a business risk as debt continued to grow unabated".
However, UTL's spokesperson, Mark Kaheru, said the company only owed MTN Uganda 6.2 billion shillings, and the debt was being contested in court.
"The rest of the money is a just a matter of reconciliation between us. We need to first sit down and know how much they owe us and vice versa and we settle each other," he told Reuters.
More than seven million subscribers from both operators could be affected if MTN Uganda severs links with UTL.
Uganda has six main telecommunications operators with MTN Uganda, which controls more than half of the market, having more than 10 million subscribers.
The east African country's telecoms sector has expanded considerably over the last five years, mainly underpinned by the penetration of the rural market.
The ensuing cutthroat competition, however, has slashed profitability margins as revenue per user has plummeted.
MTN Uganda threatened to stop its interconnectivity service to Uganda Telecom on March 14 over its failure to pay 20 billion shillings ($8.39 million) in interconnection fees.
UTL, majority owned by Libya's flagship Africa investment vehicle, LAP Green, accumulated the debt over the last three years and several attempts to secure payment have been fruitless, MTN Uganda said in a statement.
"Uganda Telecom Limited has unjustifiably and persistently refused to honour their business obligation and attempts to resolve the matter of outstanding unpaid dues, thus forcing us to take this unavoidable step," the company said.
MTN Uganda said continuing its agreement with UTL was "a business risk as debt continued to grow unabated".
However, UTL's spokesperson, Mark Kaheru, said the company only owed MTN Uganda 6.2 billion shillings, and the debt was being contested in court.
"The rest of the money is a just a matter of reconciliation between us. We need to first sit down and know how much they owe us and vice versa and we settle each other," he told Reuters.
More than seven million subscribers from both operators could be affected if MTN Uganda severs links with UTL.
Uganda has six main telecommunications operators with MTN Uganda, which controls more than half of the market, having more than 10 million subscribers.
The east African country's telecoms sector has expanded considerably over the last five years, mainly underpinned by the penetration of the rural market.
The ensuing cutthroat competition, however, has slashed profitability margins as revenue per user has plummeted.
