Telecommunications operators in Uganda have risen to oppose government’s directive that all its businesses be handled by struggling Uganda Telecom Limited (UTL), in which the state has a minority stake.
In the directive issued on September 14th, government ordered that all public offices should buy their internet, mobile and fixed telephone services from UTL.
On September 22nd, UTL’s administrator, Bemanya Twebaze met and briefed accounting officers on how they would implement the decision.
Twebaze who is the Registrar General of the Uganda Registration Service Bureau (URSB) is heading UTL as government’s official receiver after the telecom declared bankruptcy in May 2017.
He said the telecom has embarked on a strategy to enhance affordability and availability of internet in Uganda to make the country competitive in the region.
But other telecoms have objected the manner in which their competitor was awarded the services without competitive bidding.
They have raised questions on whether the country is still pursuing a liberalized economy and whether their reward for continuously investing in infrastructure upgrades is awarding services to an organization that is administration.
MTN CEO Wim Vanhelleputte said in a letter to UCC that the directive “undermines the operational regime of a fully liberalised sector, and promotes anti-competitive behavior by ring-fencing a major sector of the economy for one operator, to the prejudice of other licensed operators.”
He said the decision goes against free market principles urging regulators to call for negotiations, failure of which, they would seek legal redress.
Since 2013, government Ministries, Departments and Agencies have been required to buy internet backbone services from the National Information Technology Authority of Uganda (NITA-U) which manages the National Backbone Infrastructure through Telmec.
The infrastructure is fully owned by government, contrary to UTL whose ownership is still unclear.
ICT Ministry Weighs in
ICT Ministry Permanent Secretary Vincent Bagiire noted that transferring services to UTL will leave uncertainty on the future and purpose of the NBI in which government has invested in excess of USD 140million.
He said the directive contravenes with the NITA-U Act of 2009 which envisaged that the NBI be used as a primary vehicle for all internet services for government. The Act is still in place and has never been rescinded.
Bagiire also hinted on the unresolved ownership of Uganda Telecom saying “we as a sector do not know whether UTL is fully owned by government or not.”
“We hold a view that any possible litigation may have consequences that compromise government,” he added.
PC Tech Magazine understands that UTL operates a 2G network while most of the competitors are on 4G.
Uganda’s telecoms sector was deregulated in 1998, allowing the entry of MTN, Airtel and other players.
The Ugandan government does not have its own data provision services, with 80% of telecom companies being foreign owned.