MTN Uganda has been directed by the Commercial Division of the High Court to compensate VAS Garage Limited with over Shs. 11.3 billion for contract violations, misuse of data, and anti-competitive behavior. The ruling, issued by Justice Stephen Mubiru on April 21, concludes a legal battle that has spanned nearly a decade.
The dispute originated in 2014 when VAS Garage, a licensed provider of value-added services (VAS), entered into an agreement with MTN to deliver digital content through official shortcodes 6666 and 0800206666, with the telecom operator responsible for billing and revenue sharing.
As part of the deal, VAS Garage invested heavily in building a content platform and promoting its services, ultimately generating a user base of MTN subscribers who had opted in. However, in 2015, MTN removed VAS Garage’s subscriber data, citing regulatory directives from the Uganda Communications Commission (UCC) regarding the implementation of a “Do Not Disturb” (DND) feature aimed at limiting unsolicited communications.
Justice Mubiru found that this action breached the Content Provision Agreement, as there was no clear directive from UCC authorizing the deletion. Evidence presented in court included a 2018 UCC finding that confirmed MTN had wrongly deleted VAS Garage’s subscriber data, which the court held was developed through significant commercial effort and therefore carried proprietary value.
The judge also condemned MTN for using its market dominance to undermine VAS Garage while continuing to promote its own internal VAS platform, MTN Play, under more favorable terms. This was deemed to be unfair competition, as it restricted third-party content providers’ access while giving the telecom operator a competitive edge.
“MTN took advantage of its control over the infrastructure and data to remove a competitor from the ecosystem,” Justice Mubiru noted. “This conduct violates fair trade practices and the principles of competition law.”
MTN’s defense—that the issue had already been resolved through UCC and that the matter was time-barred—was rejected. The court clarified that while UCC regulates the industry, it lacks the legal mandate to issue financial compensation. Given the non-operational status of the Uganda Communications Tribunal, the court exercised its jurisdiction to offer relief.
In total, the court awarded:
Shs. 1.26 billion in interest on unpaid invoices
Shs. 300 million to recover marketing expenditures
Shs. 8.37 billion in lost revenue over a 29-month period
Shs. 1.39 billion for general damages due to conversion and unfair practices.
Additionally, the court ordered interest of 19% per annum on the entire award from the date of the judgment until the final payment is made. MTN was also instructed to cover the full legal costs incurred by VAS Garage, including representation by two lawyers.
This landmark ruling reinforces the rights of digital content providers and draws a firm line on the responsibilities of telecom operators when handling third-party data and service agreements. It is expected to have far-reaching implications for Uganda’s telecommunications and digital services sector.
