The Independent Uganda: You get the Truth we Pay the Price
After that, SMS Empire contends, MTN arbitrarily amended the contract and introduced new terms, which SMS Empire claims were detrimental to their business. MTN introduced fees of Shs. 5 million a month and monthly expiring of databases.
SMS Empire claims it had spent the last eight years compiling a database of numbers, which was at the core of their business and expiring the same was in effect tantamount to kicking them out of business. MTN claimed the new terms were as a result of directives by the telecom regulator. UCC has since denied ever issuing such a directive.
SMS Empire protested these new terms but with not much success as MTN went ahead to implement them.
SMS Empire alleges it discovered that MTN was now using the databases they had forced them to expire. SMS Empire alleges it discovered this when they carried out a check and found that MTN had continued to send messages to numbers compiled by them suing MTN play value added services.
Numbers which MTN had forced SMS Empire to disconnect from their database were receiving alerts from MTN.
SMS Empire says it also discovered that all along MTN had been cheating them by under declaring revenue. Apparently, MTN was only declaring 17.6 percent to 19.7 percent of the revenue that was supposed to be paid to SMS Empire.
SMS Empire discovered this by carrying out a spot check on the numbers in their database. For instance, for one of the numbers MTN had only declared revenue for 208 messages yet it had collected revenue for 1,178 messages sent by SMS Empire. For another number MTN declared only 1,010 messages yet the total was 5,119 and for another, 94,859 yet the total was 97,577.
While SMS Empire had persisted under these circumstances, it says in 2015 things got out of hand. From January to October 2015, SMS Empire offered services to MTN subscribers and MTN billed and collected revenue but never declared or paid the company any coin. This forced SMS Empire to close shop and sue.
In its defence, MTN refutes the accusations. A witness statement by Mike Blackburn, the Chief Financial Officer (CFO), noted that he did not recall any time when SMS Empire raised financial issues on the statements shared between the two of them that MTN failed to address.
He also noted that the basis for determination of sharable revenue was HITS and not customer airtime usage reports as alleged now by SMS Empire and both parties shared the HITS information before invoicing and payment.
As for 2015, Blackburn acknowledged that SMS Empire continued to provide services while the parties were discussing the new contract terms and no payment was made because there was no agreement in place stating revenue share applicable. “AS such my staff were not empowered to do financial reconciliations and settlements,” Blackburn noted in July 18 ,2017 statement filed by MTN lawyers, Sebalu and Lule Advocates.
However, a study on USSD and SMS services commissioned by UCC and carried out by Macmillan Keck, a Geneva-based law firm, reports complaints similar to those of SMS Empire.
The study dated Dec.13, a copy of which The Independent has seen, reveals that MTN and Airtel were exploiting their market domination to treat service providers like SMS Empire unfairly.
For instance, the study revealed that revenue share payments from the telecoms often delayed, were calculated incorrectly, or not made at all.
“Many VAS providers complained that MTN expired databases and Airtel suspended all commercial subscription services, destroying their content services business,” the study noted.
Yet, the study added, the two continued to provide their own content services uninterrupted.
