Airtel Uganda will not shut off telecommunications traffic originating from cash-strapped Uganda Telecom after the two reached a payment agreement.

Airtel, a subsidiary of India's Bharti group, earlier this week said that its interconnection agreement with Uganda Telecom, which is owned by the Libya African Investment Portfolio, was terminated Aug. 15 over a US$2.3 million debt. An Airtel newspaper advertisement had told subscribers they would not be able to make or receive calls from Uganda Telecom.

Between the two telcos, about 4 million subscribers would have been affected if Airtel had stopped calls Uganda Telecom terminating on its network infrastructure.

"They have agreed to a new payments plan and so will not switch off Uganda Telecom calls," said Godfrey Mutabazi, the executive director of the Uganda Communications Commission (UCC), the industry regulator. He did not provide details of the agreement. "Both UCC and the Ministry of Information and Communication

Technology have agreed with Airtel not to go ahead and lock out Uganda Telecom subscribers from accessing their network."

Airtel had said it would shut off Uganda Telecom traffic effective Sept. 5 unless half of the debt had been paid. The decision to terminate the interconnection agreement came after Uganda Telecom lost three cases in court over the unpaid fees.

Airtel Uganda spokesman Joseph Kanyamunyu said that Uganda Telecom neglected to pay interconnect fees since 2008. The termination was aimed at preventing further debt accumulation.

This is the second time this year that Uganda Telecom subscribers were faced with termination of calls to rival networks. In April, MTN Uganda threatened to suspend carrying Uganda Telecom call traffic because of unpaid interconnect fees. A court had ordered that Uganda Telecom pay MTN Uganda, the country's largest telco, US$2.17 million in unpaid interconnect charges, damages and interest. The legal tussle between Uganda Telecom and MTN is still in the courts after the latter appealed the ruling saying it was unfair.

The Libya Africa Investment Portfolio is an investment vehicle that has been managing Libyan investments on the African continent for the government of Moammar Gadhafi.