The Uganda Telecommunications sector is today one of the most liberalised in Africa and reflects the government’s widespread reforms in the economy.
Uganda has two basic service operators: Uganda Telecom Limited, the state-owned operator and Mobile Telecom Networks (MTN), which was awarded the Second National Operator licence in 1998. There are two operational cellular mobile networks – Celtel (launched in 1995) and MTN (launched in 1998). A third cellular licence has been reserved for Uganda Telecom Limited which was due for privatisation by mid-November 1999. UTL expected to commence its cellular roll-out between December 1999 and March 2000.
The basic public telecommunication infrastructure is still mainly that of UTL, with a teledensity (excluding cellular and other mobile radios) of 0.39/100. MTN, the second operator, has now commenced fixed services and no data is yet available on the number of subscribers.
The commencement of MTN mobile operations in October 1998 resulted in a drastic tariff cuts of up to 33%, which compelled the first cellular operator, Celtel, to follow suit and reduce its tariffs. It is estimated that MTN has over 65% (26 000 subscribers) of the total cellular mobile market since it started operations in October 1998.
Celtel commenced operations in May 1995 and presently has an estimated 21 000 subscribers. Both operators have customers in the main capital city, Kampala, and Agendas other major towns, including Jinja and Entebbe.
Trunked mobile radio services are provided by Starlight Communications. Starlight has three divisions: a trunked mobile division, a data net-work and payphone system. Internet services are provided by Infocom (U) Ltd , Swiftglobal and AfricaOnline.
With the two national operators and three cellular mobile networks, there are no immediate plans for any major licences in the near future. The minor licence service areas are fully liberalised; consequently, potential investors can easily obtain a licence for the operation of Internet, paging, data services and value added network services.
Internet services are provided by Infocom Ltd – a merger between two earlier providers i.e. Info-mail and Starcom. The point of presence remains Kampala only. There are other providers like Swiftglobal, Wilken Afsat, Bushnet and AfricaOnline.
Parastatal and government organisations like Uganda Railways, Uganda Electricity Board, the Uganda Police Force and Uganda People’s Defence Force operate their own private communications.
Several private companies operate their own closed network HF and VHF radios. Of late, closed networks for multinational companies have been authorised to operate VSAT networks with hubs in their headquarters outside Uganda. Wilken Afsat is offering VSAT hubbing services in Uganda.
A special service for border areas was initiated on the borders with Kenya. UTL installed payphones in Kenya close to the border, to allow customers in border communities to call Uganda for a price of a local call. Telkom Kenya has done the same in Uganda.
UTL is offering high-speed data on the existing copper cables in the local loop using high bit rate Digital Subscriber Loop (HDSL) technology on a trial basis. All new major transmission links are planned as SDH radio or fibre optic routes. All major exchanges introduced in the network will in future be able to support signalling No 7 and N-ISDN services.
In preparation for the privatisation of UTL, the government has made significant financial restructuring proposals which are part of the negotiations with the strategic investors taking over UTL. The purpose of restructuring is to make UTL attractive to investors. Key aspects of financial restructuring include:
- Debt swap of unpaid government telephone bills for long term loans owed by UTL to the government;
- Debt write-down and assumption of certain long term debts;
- Asset revaluation to more adequately reflect current market rates;
- Tax waiver of past corporation taxes;
- Removal of non-core assets from the balance sheet; and
- Provision of doubtful debts.
While the equity shareholding is already decided, the strategic investor will largely decide the financing of the UTL operation as the major shareholder. UTL has an obligation to provide interconnection to other operators when requested. If negotiations fail between a requesting operator and UTL, default interconnect pricing inserted in the licence of UTL takes effect.
The objectives of the development plans are to:
- Provide a fully automatic network;
- Extend services to every part of the country;
- Evolve an integrated service digital network (ISDN);
- Improve international connectivity, particularly within the region; and
- Introduce advanced services.
Scattered demand and high-cost infrastructure characterise rural and remote areas in Uganda. A unique requirement for rural areas, which may be satisfied by telecommunication-based solutions, is their remoteness from social services like health, education and information centres – a situation demanding an even more sophisticated broad band network for rural areas.
Individual needs for rural areas in Uganda are currently met by single and dual channel VHF radio systems, small capacity radios and low-cost exchanges (Rural automatic exchanges).
