Making sense of government stringent’ conditions for Telecoms
The government recently passed what by its own admission are ‘stringent’ new conditions that will govern the licensing of telecommunication companies in Uganda.
Some of the stringent new conditions include the requirement that telecom companies to respect and implement number portability across their networks.
The terminology means that a customer needs just one number to access services of all telecom companies.
Sources from the industry however say they proposal was first introduced ten years ago by UCC but it faced ‘political’ resistance. Implementation of this condition is likely to face even tougher opposition from the stakeholders including customers some of whom have already personalised their lines for personal and business purposes.
Listing on the USE
Besides number portability, the government has set a new requirement for all telecom companies to list shares on the Uganda Stock Exchange (USE) as a way to mitigate capital flight by telecom companies.
The measure comes in the wake of reports that MTN Uganda dispatches a lot of money back home to South Africa. Some experts have however punched holes in the stringent conditions as mere posturing. This is perhaps because of whereas the government on the one hand issued the new conditions as a requirement on license renewal, they went ahead to direct UCC to renew the Operator’s License for ten more years. If UCC goes ahead to renew the license, they will set a dangerous precedent where the government will not have the moral authority to demand other telecos to meet the conditions without playing by the rules.
The conditions attracted mixed views from the public. President Museveni’s son in law Odrek Rwabwogo praised the move thus; “The decision by Uganda cabinet yesterday to enforce listing of some minimum stock of Telcos in the USE is a ground breaking one many of us have prayed for in years. It gives Ugandans a skin in the game, limits capital flight and opens a door to youth start-ups to raise capital.”
ICT for Development Expert James Wire Lungabo said the broadband policy is a step in the right direction.
He said: “I commend the GoU for the steps taken. The telecoms sector has had less growth than it would have all because of the selfishness of the players.
On listing on the Uganda Security Exhange (USE), Wire says: “This was supposed to have been done already by all the Telcos. I clearly recall that being given as one of the conditions of privatising the Telecoms space. As a result, over the last 2 decades, we have had a lot of capital flight with all the profits being made heading out of the country.
If the public can have at least 40%, then we are sure of retaining a slice. I hope the policy did not merely say “Listing on the USE”, they should give a minimum % of shareholding to go public. This also solves the Gov’s concern of money earned in Uganda heading out of the country in its entirety.
Asked if the government’s possible tactic to delay issuing MTN a license would create uncertainity, Wire observed that: “The government is merely aiming at making them more accountable. They seem to have grown too big and thought that they could do things according to their whims.
Unfortunately, their cozy relationship with UCC only make compliance more complicated. If you got access to the list of infringements that cabinet raised against MTN, you’ll be in shock. They have gone ahead to communicate them in the renewal communication indicating that there should be no repeat of such.”
“A license can be renewed even before they meet the set terms because if they do not eventually meet them, the same license can be revoked. So, its ok to go ahead and allow them the new period of operation.”