Frowns & Disputes Deface Smile Telecom’s Presence In Uganda

Since early February 2022, Smile Communications, which before then was one of Uganda’s best-known mobile network operators, has been out of service. 

In a complication that perturbed unsuspecting users, Smile Uganda’s internet connection speeds became ridiculously slower and some regions experienced a complete cut-off. After a series of consumer complaints, it came to light that the operator had abruptly suspended its TD-LTE 4G network offering. 

In a February 2nd tweet acknowledging the outage, Smile said there was no definite timeline for connections to be restored, leaving customers even more displeased—and calling for a permanent cessation of the service should it be unable to resume promptly. 

Though Smile’s management apologized to its users and promised them compensation plans, the company failed [or forgot] to inform its industry regulatory, the Uganda Communications Commission (UCC) of the outage and its plans toward restoring the connection. 

Since this violates existing regulatory directives, the telco is by the Amended Regulations 2020 supposed to be fined 10 percent of its yearly revenue. 

However, the UCC has, for some unfounded reasons, failed to see to it that the fines are paid, and the East African country’s government is cross with the regulator’s seeming negligence towards the matter. 

Though there were reports that the UCC was on the verge of clamping down on the carrier legally, those efforts came up short-lived. The ombudsman gave Smile 14 working days to rectify or risk a forced Ugandan exit. 

Perhaps, this ultimatum motivated the operator to inform its customer that it was overhauling its services, however in a process it said would take longer than envisaged. 

Till now, Smile is missing in action, and Uganda’s auditor general, John Muwanga, has chosen to pick the bone with the UCC. According to him, part of the USD 540 K fine comes from outstanding payables and license violations. 

In defense, the UCC indicated that Smile applied for a Regional Public Service Provider and National Public Infrastructure Provider (IPP) license but later switched to a Regional PIP and Regional PSP license; the change is still in progress. 

Barring the general authorization granted to transiting operations, the UCC says Smile had no valid license and [that] its services were discontinued following the disconnection of American Tower Company (ATC) due to failure to pay carriage fees accrued over time. 

Smile drew a lawsuit against ATC for unfair and irregular treatment, and the case is still active. Meanwhile, the company’s stakeholders have approved a refinancing agreement of USD 120 M to enable the operator to resume its Ugandan operations. 

Smile, which delivers affordable, high-quality, and seamless broadband and communication services, established its Ugandan presence in November 2009. Transitioning to data-only offerings, the business launched its 4G LTE offering in 2013, kicking off in Kampala, the country’s capital and biggest city. 

Its struggles started in 2017 when it was forced to sack 50 employees due to financial constraints. Roughly a year after the layoffs, a 3-day connectivity outage besieged several locations in the country. It appears Uganda is a tough market, given that both Orange and Africell gave in to similar struggles and exited the market in the last couple of years.

The company, whose origins can be traced to South Africa, also has footprints in Tanzania, DR Congo, and Nigeria. 

Featured Image: New Project