Tel­cos protest Uganda Tele­coms tak­ing over busi­ness

The East African - - BUSINESS - By HALIMA ABDALLAH Spe­cial Cor­re­spon­dent

TEL­COS IN Uganda have protested a gov­ern­ment di­rec­tive that all its busi­ness will be han­dled by Uganda Tele­coms Ltd (UTL), in which the gov­ern­ment has a mi­nor­ity stake.

On Septem­ber 14, the gov­ern­ment di­rected that public of­fices should buy their In­ter­net, mo­bile and fixed tele­phone ser­vices from UTL. Since 2013, gov­ern­ment min­istries, de­part­ments and agen­cies have been re­quired to buy In­ter­net back­bone ser­vices from NBI, a public in­fra­struc­ture com­pany man­aged by Telmec.

Tel­cos, led by MTN Uganda, say the de­ci­sion goes against free mar­ket prin­ci­ples. They are call­ing on the sec­tor reg­u­la­tor, Uganda Com­mu­ni­ca­tions Com­mis­sion (UCC), to call for ne­go­ti­a­tions, fail­ing which they will seek le­gal re­dress. “The di­rec­tive un­der­mines the op­er­a­tional regime of a fully lib­er­alised sec­tor, and pro­motes anti-com­pet­i­tive be­hav­iour by ringfenc­ing a ma­jor sec­tor of the econ­omy for one op­er­a­tor to the prej­u­dice of other li­censed op­er­a­tors,” MTN’S CEO, Wim Van­helleputte, said in a let­ter to UCC.

The gov­ern­ment says the move is meant to help UTL write off mas­sive debts that led to it be­ing placed un­der ad­min­is­tra­tion. How­ever, UTL op­er­ates a 2G net­work while com­peti­tors are on 4G.

The tel­coms sec­tor was lib­er­alised in 1998 al­low­ing the en­try of MTN, Air­tel and other play­ers. The Ugan­dan gov­ern­ment does not have its own data pro­vid­ing ser­vices. Eighty per cent of com­pa­nies are for­eign owned.

Pri­vate op­er­a­tors say the gov­ern­ment’s ac­tion is in breach of the UCC Act, 2013, and the Public Pro­cure­ment and Dis­posal of As­sets Act, 2003.

“The com­mis­sion shall in the per­for­mance of its func­tions un­der this act pro­mote , de­velop and en­force fair com­pe­ti­tion and equal­ity of treat­ment among all op­er­a­tors in any busi­ness or ser­vice re­lat­ing to the com­mu­ni­ca­tion,” reads the UCC Act.

On Septem­ber 22, UTL ad­min­is­tra­tor Be­manya Twe­baze briefed accounting of­fi­cers on how they would im­ple­ment the de­ci­sion.

“UTL has now em­barked on a strat­egy to en­hance af­ford­abil­ity and avail­abil­ity of In­ter­net in Uganda to make our coun­try com­pet­i­tive in the re­gion,” Mr Twe­baze said.

UTL was placed un­der an ad­min­is­tra­tor in April 2017 af­ter a fall-out with ma­jor­ity share­hold­ers in Libya. Libya owned 69 per cent while Uganda owned 31 per cent. In Fe­bru­ary, Libya re­called its di­rec­tors, leav­ing Uganda with the bur­den of keep­ing the com­pany afloat.

Newspapers in English

Newspapers from Kenya

© PressReader. All rights reserved.