September 16, 2018

UCC mediates K2 – Airtel dispute

June 08, 2018 – Spectrum regulator Uganda Communications Commission is mediating between carrier Airtel and defunct Buganda operator K2 – Telecom, with the view to unlocking the stalled transfer of the latter’s business to the former.

A source at UCC told 256BN that the mediation would start on June 7, with a view to allowing the parties unlock the deal. The source added that UCC would try to help the parties arrive at win-win point under the present circumstances.

This website reported earlier this year that the two parties had concluded a sale and purchase agreement and Airtel had even migrated ex-K2 customers to its network. The deal was however, not fully consummated after a dispute emerged.

256BN has now been told the dispute revolves around responsibility for K2’s liabilities, among them a much publicised UGX 96 million in tax arrears and an unspecified amount in outstanding interconnection fees to other carriers.

Under the main agreement, Airtel would takeover K2’s subscribers but maintain the K2’s number range and brand. That meant that current and prospective K2 subscribers would continue to use the 073 carrier code in pretty much the same way ex-Warid customers are still using the 070 code.

The standoff has negatively affected K2’s fifty permanent employees who were pegging hopes on a quick settlement while the fate of another 160 temporary workers remains uncertain.

K2 Telecom was one of the many franchising agreements under which the Buganda administration in Mengo allows private interests to ride on the popularity of Buganda’s titular head, the Kabaka, to gain quick traction in the market. The formula which started with Central Broadcasting Services in the mid-nineties has since expanded to a number of businesses among them recent entrant BBS Telefayina, a Tv station owned by flamboyant Buganda business magnate Kiyimba Freeman.

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