BrandArena: REVEALED: Why Smile Network Was Disconnected For 15-Month in Uganda and East Africa

Tuesday 20 June 2023

REVEALED: Why Smile Network Was Disconnected For 15-Month in Uganda and East Africa

...Firm Apologies to Customers
...Promises to Continue Legal Action Against ATC 

Smile, the pioneering provider of 4G LTE services in Uganda and East Africa, has formally apologised to its customers and the general public for the 15-month service disruption, noting that the notification should have been delivered earlier. According to the company, it was necessary to wait for the completion of certain legal processes before disclosing this information.

It claimed that the outage was caused by American Towers Corporation (ATC) illegally disconnecting the Smile network, which violated ATC's licence duties, industry best practices, and, most significantly, the Ugandan people's well-being.

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.

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.

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.

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.

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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