UCC pinned for negligence over billions in fines on Smile Telecom

The Auditor General notes that part of the money is due to a fine that UCC failed to collect from Smile and now risks zero payment due to negligence.

According to the report, Smile violated the terms of its licence when it unceremoniously discontinued services in January 2022 thus attracting a fine of up to 10 per cent of its gross annual revenue.

However, UCC did not have in place measures to recover the fine and currently risks losing the funds because Smile revoked its services.

“Smile discontinued its [service] in January 2022 without authorisation. UCC, however, did not suspend or revoke the licence as guided by the [law]. [UCC] did not fine Smile for violating the terms and conditions of the licence. Furthermore, I noted that Smile has an outstanding obligation to Shs227.3m and $505,079.47 ((Shs1.8b) payable to UCC,” the report reads.

Under the UCC (fees and fines) Amendment Regulations 2020, an operator who discontinues services without authority is liable to a fine of up to 10 per cent of gross annual revenue.

In response, UCC said Smile is still going through a transition from Regional Public Service Provider and National Public Infrastructure Provider (PIP) licence but changed to a Regional PIP and Regional PSP licence.

UCC also noted that at the time, Smile did not have a valid licence and was operating on a general authorisation which is granted to transiting operators.

The Auditor General’s report further indicated that at the time Smile discontinued its services, the American Tower Company (ATC) had disconnected them over failure to pay tower carriage fees. Smile has since been in court with ATC over allegations of unfair and irregular treatment.

According to Irene Kaggwa, the UCC acting executive director, it is the dispute that led to the premature disconnection of Smile.

Smile Telecom chairperson, Beatrice Kiraso, said she had missed the details of the Auditor General's report noting that she would have communicated thereafter.

Trouble for Smile started in February 2022 when users couldn't access the network and some complained about slow speed. The conflict cascaded down to a fundamental dispute between Smile and its suppliers.