Millicom (Luxembourg) and the government of Senegal appear to have settled their differences over a mobile-phone license, bringing a four-year dispute to an end.
The two parties fell out in 2008 when Senegalese authorities reportedly asked Millicom to cough up $200 million for the renewal of its mobile-phone license.
Millicom rejected the demand on the grounds that it already owned that license and offered a much lower sum for the right to provide 3G services on top of its existing offers.
The case went before international law courts while Millicom continued to provide telecoms services under its Tigo brand.
This week, however, Millicom announced that the Senegalese government had agreed to recognise the validity of its license.
The operator has agreed to pay a fee of $103 million to the government for the right to provide 3G, fixed-line, WiMax and cable TV services. It will also receive some additional spectrum and have the term of its license to provide mobile-phone services extended by another ten years.
Millicom says the settlement is subject to the signing of final documentation between Millicom and the government of Senegal, as well as the publication of an amended license.
The operator is to pay the $103 million fee in several instalments between the closing of the agreement and December 2013.
“We are delighted to have reached an agreement with the newly elected government of the Republic of Senegal in a way that will be beneficial to both parties involved, as well as to the people of Senegal and our Tigo customers,” said Mikael Grahne, Millicom’s chief executive, in a statement.
“An amicable settlement has always been the preferred solution for Millicom. This agreement will enable us to enrich our product offering in Senegal over the next 16 years with the addition of new services, including 3G mobile internet and mobile financial services that we are now offering successfully in Tanzania, Rwanda, Ghana and DRC,” he said.
Both parties have requested a three-month suspension of the ongoing arbitration proceedings in order to finalize the documentation needed for the agreement to close.