MTN Uganda has been directed to pay more than Shs11.3 billion to VAS Garage Ltd., a provider of telecom value-added services, following a court ruling that found the telecom giant guilty of breaching contract terms and engaging in unfair competition.
In a judgment delivered on April 21, Justice Stephen Mubiru of the Commercial Division of the High Court ruled that MTN unlawfully terminated VAS Garage’s subscription databases and service keywords under the pretense of complying with a Uganda Communications Commission (UCC) directive aimed at curbing unsolicited SMS.
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Justice Mubiru noted that MTN’s actions disrupted VAS Garage’s operations and revenue generation, pointing out that the telecom company, which also offers similar services, viewed VAS Garage as a competitor. “MTN’s deletion of the plaintiff’s digital assets was not sanctioned by UCC and was clearly intended to unfairly restrict competition,” the judge stated.
VAS Garage began working with MTN in 2012 under a content provision agreement, investing heavily in marketing to attract and retain subscribers. However, in 2018, MTN cited a UCC directive as justification for deleting the subscription data, although UCC later clarified it had not instructed service providers to erase databases.
The court awarded VAS Garage Shs8.3 billion for lost income over 29 months, Shs300 million for promotional expenses, Shs1.3 billion in general damages for unfair competition and digital asset conversion, and Shs1.2 billion in interest on overdue payments. The judgment also includes 19% interest per annum on the total award from the ruling date until full settlement, along with legal costs.
The ruling affirms that MTN selectively applied regulatory guidelines to suppress competition, sparking a landmark case on corporate accountability in Uganda’s telecom sector.
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