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LICENCE AGREEMENTS |
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MTN Cameroon Limited
The licence authorises MTN Cameroon Limited to set up and run a 900MHz national mobile GSM cellular telephony network within the
geographic territory of Cameroon. The licence was granted on 15 February 2000 and is valid for a period of 15 years, renewable for 10 years
thereafter. The Group paid an initial licence fee of CFA40,4 billion and pays an annual licence fee based on 1% of network revenue as defined in
the licence agreement for the first two years and 2% on network revenue from the third year onwards. Furthermore, an advance payment of
CFA200 000 per year is payable for microwave usage until a general formula of calculation is adopted with the Regulatory Board. |
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MTN Nigeria Communications Limited
The licence authorises MTN Nigeria Communications Limited to provide and operate a 900MHz and 1800MHz second generation digital mobile
service within the geographic territory of Nigeria. The licence was granted on 9 February 2001 and is valid for a period of 15 years, renewable
for five years thereafter. The Group paid an initial licence fee of USD285 million and in addition, pays an annual licence fee based on 2,5% of
assessed net revenue as defined in the licence.
A 3G licence was granted to MTN Nigeria Communications Limited during the year. This licence is a spectrum licence that allows use of specified
3G spectrum (receive 1920 – 1930MHz and transmit 2110 – 2120MHz). The licence was granted on 1 May 2007 and is valid for a period of
15 years, renewable on expiration by mutual agreement of Commission and Licence. There is no automatic renewal. The Group paid an initial fee
of USD150 million for the licence and there is no annual fees payable on the licence. |
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MTN Rwandacell S.A.R.L
The licence authorises MTN Rwandacell S.A.R.L to construct, maintain and operate a 900MHz, 1800MHz and 1900MHz (including cellular public
pay telephones) GSM telecommunication network within the geographic territory of Rwanda. In 2008 the licence was renewed, an amount
of USD500 000 was paid for an extension to the old licence and is valid for 13 years and may be terminated thereafter with a two-year written
notice period. The Group paid an initial licence fee of USD200 000 and in addition, pays an annual licence fee based on 3% (December 2007:
3%) of network revenue as defined in the licence. Furthermore, a frequency fee of USD2 000 per 1MHz granted and an annual spectrum fee of
USD50 000 are payable. |
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MTN Uganda Limited
The licence authorises MTN Uganda Limited to construct, maintain and operate a 900MHz and 1800MHz national second generation digital
mobile radio telephony service within the geographic territory of Uganda. The licence was granted on 15 April 1998 and is valid for a period
of 20 years. The Group paid an initial licence fee of USD5,8 million and an annual spectrum fee of 1% of network revenue is payable as a
contribution to the Rural Communications Development Fund. |
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Irancell Telecommunication Company Services
The licence authorises Irancell Telecommunication Company Services to construct and operate a GSM-standard mobile radio-communication
network for the purpose of providing a full range of licensed services within the Islamic Republic of Iran. The licence was granted on
27 November 2006 and has a validity period of up to 15 years with two renewable periods of five years each. An initial licence fee of EUR300 million was paid. An annual regulatory fee of 0,25% of revenue of the preceding contractual year, an annual universal service
contribution fee of 3% of revenue of the preceding contractual year and other fixed fees, all totalling in aggregate not more than 5% of revenue
from the previous contractual year are payable in each contractual year of the licence. In addition, Irancell Telecommunication Company
Services is required to pay 28,1% of revenue in each contractual year, with a minimum guaranteed amount based upon 80% of 28,1% of the
revenue amount included in the business plan, subject to certain conditions being met, on an annual basis.
The licence allows Irancell Telecommunication Company Services equipment providing access and communication for rendering services to the
subscribers of radio communication networks based on WiMAX technology, including switching centres and base stations and other equipment
necessary for its proper functioning (excluding mother backbone and international gateways). The licence was granted on 23 December 2008
and has a validity of up to six years renewable for five years. An initial licence fee of EUR50,7 million was paid. |
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Scancom Limited (Ghana)
The licence authorises Scancom Limited to construct, maintain and operate a telecommunications network using 900MHz and 1800Mhz
frequencies within the region of Ghana. Active coverage is required in all regions by 2011. This licence was effective 2 December 2004 for a
period of 15 years, renewable for another 10 years with three months’ notice. A once-off licence fee of USD22,5 million was paid with an annual
regulatory fee of USD750 000. An annual fee of 1% of revenue is payable to the Ghana Investment Fund for Telecommunications due on
15 April every year. No exclusivity clause exists and a maximum of two new licences may be awarded during this term. |
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Areeba Limited (Cyprus)
The licence authorises Areeba Limited to construct and operate a 900MHz and 1800MHz GSM and 3G/UMTS network and requires 50% GSM
geographic coverage by year two, and 60% 3G/UMTS coverage by year 10. The licence period commenced in December 2003 for a period of
20 years, renewable. An exclusivity clause is applicable, which lasts until the earlier of 25% market share or five years. |
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Spacetel Benin SA
The licence authorises Spacetel Benin to construct and operate a 900MHz and 1800MHz GSM network for a period of 10 years and to have
100% geographic coverage. The effective date of the licence is 19 October 2007 and can be automatically extended for another five years
without any additional fees if performance levels are met. The expiration date is 18 October 2017. |
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Areeba Afghanistan
The licence authorises Areeba Afghanistan to construct and operate a 900MHz and 1800MHz GSM network to have 80% geographic coverage
within the first year of the commencement date. A once-off licence fee of USD40 million was paid with an annual fee of 2% of net revenue.
The licence agreement is effective from October 2006 and is applicable for 15 years and is renewable thereafter for an additional 10 years. No
exclusivity clause exists. |
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Spacetel Guinea-Bissau SA
The licence authorises Spacetel Guinea-Bissau SA to construct and operate a 900MHz GSM network to cover 100% of the population. A onceoff
licence fee of EUR2,2 million was paid with an annual fee of XOF2 million per frequency channel. The licence agreement is effective from
December 2003 and is applicable for 10 years and renewable thereafter. No exclusivity clause exists. |
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Areeba Guinea SA
The licence authorises Areeba Guinea SA Republic to construct and operate a 900MHz and 1800MHz GSM network to cover all cities with a
population of over 100 000 within one year of commercial launch and cities with a population less than 100 000 within two years of commercial
launch. The licence agreement is effective from August 2005 and is applicable for 13 years, renewable thereafter for five years. There will be a
maximum of four operators in total up to 2010. |
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Lonestar Communications Corporation LLC (Liberia)
The licence authorises Lonestar Communications Corporation LLC to construct and operate a GSM network. There is no minimum coverage
clause. The licence agreement is effective from December 1999 and is applicable for 15 years. No exclusivity clause exists. |
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MTN Sudan Company Limited
The licence authorises MTN Sudan Company Limited to construct and operate a 900MHz and 1800MHz GSM and UMTS network and requires
coverage of large cities and main roads within four years of the commencement date. The licence agreement is effective from October 2004 and
is applicable for 15 years, renewable thereafter. |
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MTN Syria SA
This licence permits MTN Syria SA to build, manage, operate and invest in a GSM network in the Syrian region on both 900MHz and 1800MHz
frequencies, capable of servicing 850 000 users. The licence duration is 15 years renewable for another three years at the discretion of the Syrian
licensing authority, effective from June 2002. Coverage of 95% of the population is required within four to six years. After the duration of the
contract, ownership of the operation will be transferred to the Syrian authorities at no cost.
Upfront licence fees of USD20 million and USD15 million for 900MHz and 1800MHz respectively were applicable. An annual “Frequency
Protection Fee” of USD50 000 or SP2,5 million per 1MHz for transmission and reception within the band range of 900MHz or 1800MHz is payable.
Revenue share costs are also payable by Areeba on a monthly basis within 15 days after month end. These being 30% of revenue for the first
three years of the licence agreement, 40% for the next three years and 50% thereafter. A 60% revenue share would be applicable if the licence
term is renewed. The exclusivity clause states that a maximum of two operators will be allowed for a period of eight years. |
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MTN Yemen
The licence authorises MTN Yemen to construct and operate a GSM network and requires coverage of the main cities and roads within
three years. A once-off licence fee of YER10 billion was paid with an annual regulatory fee of YER1,7 billion. The licence agreement is effective
from July 2000 and is applicable for 15 years, renewable thereafter. There is a four year exclusivity clause after which licence parity will apply. |
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MTN Zambia Limited
The licence authorises MTN Zambia Limited to set up and run a cellular service within the designated bandwidth of 890MHz – 960MHz band
within the geographic territory of Zambia. The licence was granted on 23 September 1995 and is valid for a period of 15 years, renewable every
five years thereafter. An initial licence fee of USD40 000 was paid to acquire the licence and the annual operating licence fees payable are 5% of
the assessed new annual revenue. Annual spectrum fees are also payable in respect of transmission. |
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MTN Côte d’Ivoire
The licence authorises MTN Côte d’Ivoire to construct, maintain and operate a 900MHz and 1800MHz GSM telecommunication network within
the geographic territory of Côte d’Ivoire. The licence was granted on 21 December 2001 and is valid for 15 years. An initial licence fee of
CFA40 000 million was determined, which was payable from 2001 to 2007. |
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MTN Congo SA
The licence authorises MTN Congo SA to construct, maintain and operate a 900MHz and 1800MHz GSM telecommunication network within
the geographic territory of the Republic of Congo. The licence consists of a mobile licence granted on 15 October 1999 and an international
gateway licence granted on 2 February 2006, valid for 15 years. The Group paid an initial licence fee of FCFA365 million for the mobile licence
and FCFA250 million for the international gateway licence. The annual licence fee is based on 3% of local and 6% of international traffic.
Furthermore, a frequency management fee of FCFA100 million, frequency usage fee of FCFA162,2 million and a number licence fee of
FCFA60 million are payable annually. The payment for renewal is set at FCFA2,2 billion. |
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Mascom Wireless Botswana Limited
A licence was granted on 17 February 1998 and was valid for a period of 15 years. This licence was replaced with a Public Telecommunication
Operator (PTO) licence issued on 13 June 2007 and valid for a period of 15 years. The licence authorises Mascom Wireless Botswana Limited to
construct, operate and maintain public telecommunication services within the geographic area of Botswana. The licence may be renewed upon
expiry of the licence period provided that the licensee shall apply for such renewal no more than three years but not less than two years prior to
the date of expiry. During the licence period and any extended period, the licensee shall pay an annual licence fee of BWP1,080 million for the
operation of the licensed system; an annual licence fee of BWP0,178 million for provision of the licensed service and a turnover-related fee equal
to 3% of annual net turnover, reported in each quarter. |
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Swazi MTN Limited
The licence authorises Swazi MTN Limited to provide and operate a 900MHz GSM network within the geographic area of Swaziland. The licence
was granted on 31 July 1998 and is valid for a period of 10 years, renewable for 10 years thereafter. The Group pays annual spectrum fees of
E20 000 per channel used (with a minimum of Eur600 000) and a licence fee of 5% of audited net operational income as defined in the licence.
The licence was renewed for a further period of 10 years effective November 2008 to November 2018. |
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Mobile Telephone Networks (Proprietary) Limited
The Company was originally granted a licence to construct, maintain and use a 900MHz GSM national mobile cellular telecommunications
service within the South African geographic territory from 1 June 1994 for a period of 15 years, automatically renewable on mutatis mutandis,
the same terms and conditions, subject to certain provisions. The company paid an initial licence fee of R100 million and pays an annual licence
fee based on 5% of net operating income as defined in the licence. This original licence expires during 2009. In January 2005, the company was
granted the right to maintain and use the 1800MHz GSM spectrum as well as maintain and operate a UMTS (3G) network under the existing
cellular network licence with the proviso that certain additional universal service obligations (“USO”) for MTN of R561 million of which
R220 million has been recognised as an intangible asset, resulting in a commitment of R341 million which will be incurred over the next eight
years. |
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Post-balance sheet event
Since the promulgation of the Electronic Communications Act, 36 of 2005 (“ECA”), the Company’s licence has been converted and renewed as
of 15 January 2009 for a period of 15 years for the Individual Electronic Communications Service (“IECS”) licence and 20 years for the Individual
Electronic Communications Network Service (“IECNS”) licence.
The IECNS licence authorises the Company to construct, maintain and operate an electronic communications network as well as to provide
electronic communications network services and the IECS licence authorises the company to provide electronic communications services. All
these services are to be provided in the Republic of South Africa.
In terms of the IECNS licence, the Company shall continue to maintain previously implemented universal service obligations until reviewed
by the Independent Communications Authority of South Africa (“ICASA”) in terms of sections 82, 88, 89 and 90 of the ECA. The Company shall
continue to pay the remainder of its fixed licence fee of R100 million in terms of the agreed schedule of payment until it is reviewed by ICASA
in terms of Chapter 2 of the ECA. The Company shall also continue to pay the prescribed annual licence fee amounting to 5% of the audited
licence fee income, until reviewed by ICASA in terms of Chapter 2 of the ECA.
MTN considers that, this converted and renewed licence was issued on less favourable terms than the original licence granted in 1993 and
therefore not in compliance with the provisions of section 93 (1) of the ECA, in particular the conditions of “no less favourable terms”, is
engaging ICASA around the following:
– The provision relating to the fixed licence fees is no longer applicable to MTN as this condition has been fulfilled
– MTN currently pays an annual licence fee of 5% of net operational income and not 5% of the audited licence fee income
– The definition of Force Majeure is of wide interpretation and does not take into account various situations.
– Certain omissions relating to USOs, access to frequencies and performance specifications. |