Smile, a provider of 4G LTE services in Uganda and East Africa, recently experienced a service outage that began on January 31, 2022.
The cause of this outage was determined to be the decision made by American Towers (ATC) to disconnect Smile’s network. Smile has stated that this disconnection was illegal and in violation of ATC’s license obligations and industry standards.
The dispute between Smile and ATC dates back to 2018, involving issues such as discriminatory pricing practices and unfair and illegal power billing. Smile claims that ATC was charging them approximately 50 percent more than the tariffs set by the Electricity Regulatory Authority of Uganda. These matters were taken to arbitration as per the contractual agreements between the two parties.
Initially scheduled to conclude in June 2021, the arbitration process extended into 2022. Although the resulting award favored ATC, Smile was taken by surprise when, on January 31, 2022, ATC disconnected Smile’s sites without any prior notice. Consequently, Smile’s 4G LTE services were completely shut down by February 1, 2022.
In response, Smile sought legal action by filing an application with the High Court to set aside the arbitral award. On April 11, 2023, the High Court ruled in favor of Smile, citing delays in issuing the award and concerns about the arbitrator’s impartiality. ATC has not appealed this ruling to date.
Throughout the legal processes both before and after the arbitral award, Smile attempted to negotiate a settlement with ATC but faced inflexible resistance. As a result, Smile decided to terminate all contracts with ATC and requested the return of its equipment in order to resume services with an alternative tower partner. However, ATC has persistently refused to comply, effectively holding Smile hostage in an illegal and unaccountable manner.
ATC’s actions have caused significant financial damage to Smile’s investment in Uganda, amounting to approximately USD 120,000,000. Not only have these actions disrupted Smile’s operations and deprived consumers of reliable services, but they have also affected jobs and livelihoods that depend on Smile’s presence in the market.
Smile continues to pursue legal action against ATC, challenging the service shutdown and the refusal to return its equipment. The company remains committed to seeking justice and restitution and expresses sincere gratitude to its loyal customers and the general public for their ongoing support throughout this challenging process.
