On November 21, 2018, Uganda moved to tighten control over telecom infrastructure by requiring new entrants in the sector to lease capacity from existing fibre-optic networks rather than build their own parallel lines.
The policy, announced by the Uganda Communications Commission (UCC), is meant to reduce duplication, improve efficiency and help bring down the cost of internet access across the country. Godfrey Mutabazi, the regulator’s chief executive, said the government wanted operators to share infrastructure where it already exists.
“We need infrastructure sharing, if we already have cables in an area, don’t put there another one so that we don’t duplicate these things,” Mutabazi told Reuters.
The rule is part of a new national broadband policy. Under it, investors who want to lay cables in sparsely populated rural areas may be exempted, with the aim of expanding access in places that are still underserved.
Uganda said it has about 12,000 kilometres of fibre-optic cable already in place. New investors will be expected to rent access at commercial rates agreed with existing network owners, according to Mutabazi.
The regulator argued that the current model has left the sector with too many overlapping networks, high construction and maintenance costs, and under-used capacity. Those factors, it said, have helped keep internet prices high.
Uganda’s telecom market has drawn foreign investment in recent years, supported by economic growth, a young population and relative political stability. Major operators already active in the market include MTN Uganda, a unit of South Africa’s MTN Group, alongside Bharti Airtel, Google and Facebook cable networks. The government also runs a national broadband cable system built with a Chinese loan.
UCC said Uganda has about 24 million mobile phone subscribers and an estimated 17 million internet users.
Not everyone welcomed the policy shift. Kyle Spencer, executive director of the Uganda Internet Exchange Point (UIXP), said the approach was retrogressive and could entrench infrastructure monopolies, slow sector growth and reduce jobs.
Spencer pointed to the fall in bandwidth prices as evidence that competition has worked. He said costs had dropped from $5000 per megabyte per second in 2009 to about $10 per megabyte per second at the time of the report.
“The system is not broken and the reason that (price decline) has happened is because there’s been significant amounts of competition in infrastructure and service,” he said.
“The market has worked.”
