Smile Communications Uganda, the pioneering provider of 4G LTE services in Uganda and East Africa, has explained why they have been experiencing a service outage since January 31, 2022.
The telecom company says the outage was a result of American Towers Corporation (“ATC”) disconnecting the Smile network illegally contrary to ATC’s license obligations, industry best practices, and most importantly, the well-being of the Ugandan people.
“For this, Smile wishes to sincerely apologise to its valued customers and the general public. It acknowledges that this update should have been provided earlier, however, it deemed it imperative to first await the conclusion of certain legal processes before sharing these details,” Smile said in a statement today.
“Previous to that, Smile had been involved in commercial disputes with ATC since 2018 on matters related to discriminatory pricing practices, as well as unfair and illegal power billing practices where, in Smile’s case, ATC was collecting around fifty percent more than the tariffs set by the Electricity Regulatory Authority of Uganda. These disputes were duly referred to arbitration in accordance with the underlying contracts,” they added.
According to Mr. Silvernus Okoth, the Acting Country Manager, of Smile Communications Uganda Limited, , the arbitration process, initially scheduled by both parties and the arbitrator to conclude in June 2021, extended into 2022. While the resulting award was in ATC’s favour, immediately, without any notice after the issue of the arbitral award, on January 31 2022, ATC proceeded to disconnect Smile’s sites, leading to a complete shutdown of Smile’s 4G LTE services by February 1, 2022.
“Following the disconnection, Smile pursued legal action by applying to the High Court to set aside the arbitral award. The High Court ruling, handed down on April 11 2023, granted Smile’s application and set aside the award, citing delays in the issuing of the award and concerns about the arbitrator’s partiality. To date, ATC has not appealed the ruling,” Mr. Okoth said.
“While the pre-and post-arbitral award legal processes were running their courses, Smile attempted settlement negotiations with ATC but faced unyielding inflexibility from the latter. Consequently, Smile terminated all contracts with ATC and requested the return of its equipment to resume its services with an alternative Tower partner. However, ATC has been adamant, effectively continuing to illegally and with impunity hold Smile hostage.”
Mr. Okoth added that ATC’s actions have caused significant damage to Smile’s investment in Uganda, amounting to approximately USD 120,000,000.
“ATC’s actions have not only impacted Smile’s operations, denying the consumers a credible service, but have also affected jobs and livelihoods dependent on Smile’s presence in the market. It is worth noting that nowhere in the African and/or the International Telecommunications industry have such actions been allowed, it is indeed unprecedented,” he said.
“Smile has continued with legal action against ATC, challenging their service shutdown and refusal to return its equipment. The company is committed to pursuing justice and restitution and expresses its sincere gratitude to its loyal customers and the public at large for their support throughout this process. Further updates will be provided in due course as Smile keeps hope high that once this matter is resolved, services will be restored.”
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