Without authority from the UCC, Smile telecom discontinued its services in January last year, attracting a fine of up to 10 percent of its gross annual revenue.
KAMPALA — 4G/LTE provider Smile, which operates in Uganda and East Africa, has apologised to its customers for the outage that has affected its services since January 31st 2022 and explained the root cause of the issue.
Smile Telecom claims that its network was illegally disconnected by American Towers Corporation (ATC), arguing that this went against the tower firm’s licence obligations as well as industry best practices. Acknowledging that customers deserved an update far sooner, Smile stated that it had chosen to wait for the conclusion of certain legal processes prior to providing the explanation.
The companies had been involved in a commercial dispute since 2018 over allegations of discriminatory pricing practices, with Smile claiming that ATC was collecting around 50% more than the tariffs set by the Electricity Regulatory Authority of Uganda.
The disputes were referred to arbitration in accordance with the underlying contracts, and while this was initially scheduled by all involved parties to conclude in June 2021, it was extended into 2022. With the award favouring ATC, the tower firm immediately and without notice disconnected Smile’s sites, resulting in a complete shutdown of Smile’s 4G LTE services by February 1, 2022.
Smile challenged the arbitral award via the High Court and its application was granted on 11th April 2023. The previous ruling was set aside and ATC has not yet made any appeal. Throughout the process, Smile claims that it attempted to reach a settlement with ATC but was met with intransigence, resulting in it terminating all contracts with ATC and requesting the return of its equipment to allow it to work with another tower partner.
However, ATC has thus far refused to comply and faced no consequences for doing so, meaning that Smile has been unable to provide services. The operator claims that ATC’s actions have damaged its investment in Uganda to the tune of approximately US$120,000,000 as well as denying its customers service and impacting jobs and livelihoods. Smile has described the situation as unprecedented and is continuing its legal action against ATC.
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