The Uganda Communications Commission (UCC) has released a consultation Paper that aims to seek views from relevant stakeholders on the proposed review of the Telecommunications Licensing Framework to be adopted by Commission.
This is intended to give effect to the Uganda Communications Act 2013, the policy recommendations contained in the National Broadband Policy 2018, technological advancements, emerging industry trends and international best practices.
The current license framework has been in effect since 2006. Given the dynamic nature of the ICT sector, a number of factors have necessitated a review of the licensing framework. This has in recent times affected MTN as they sought to renew their license.
Proposed Framework Reviews
UCC has therefore highlighted the following areas that would need that would need to be reviewed and every telecom company will have to abide by them once approved.
Industry Developments
The current licensing framework has resulted in increased investment, entry of new players, innovative business models and services in the digital ecosystem. Under this framework, some players progressively embraced infrastructure sharing on a commercial basis with new business models emerging of specific tower companies. The existing licensing framework has increased the total number of operators from three (3) in 2006, to 27 operators in 2019, and improved the teledensity from 0.26 in 1996 to 63.9 in 2016/2017.
Despite these successes, the licensing framework has been in operation for over a decade, during which period, the telecommunications market has undergone significant changes with the emergence of new technologies and commercial practices.
Regulatory Arbitrage
We have seen UCC accuse several telecom companies of exploiting existing gaps in legislative and regulatory classifications to accrue tax, financial and competitive benefit by avoiding regulatory obligations.
The emergence of new technologies and business models that offer communication services as defined in the Communications Act 2013, but do not fit within existing classifications of licenses, pose an increasing challenge to the existing licensing framework. In many cases, telecom companies offer similar or substitutable services as the traditionally regulated entities but will take advantage of existing gaps to avoid regulatory obligations or in some cases move to other markets that provide a more predictable regulatory regime.
Effective utilisation of spectrum Resources
Spectrum is a finite resource that facilitates innovation and investment in ICTs. However, over the years, UCC has witnessed a surge in demand for spectrum due to an increase in the number of operators, customers and the nature of services offered. The existing licensing framework limits UCC’s ability to address the demands for spectrum in the market adequately, hence the need for a review.
UCC has already proposed a separate framework that seeks to address new developments in the communications industry, taking into account the Spectrum Management Guidelines.
Infrastructure rollout and the high cost of investment
National Roaming
UCC believes that once the market fully adopts National Roaming, there will be no need for duplication of investment as roaming will enable connectivity without the need for each operator to necessarily deploy a network. This will make it possible for operators to share the resources (both active equipment and spectrum) and ultimately share costs and a seamless network across the country without major outages, ensuring optimum utilisation of resources.
Infrastructure Sharing
Telecom infrastructure is one of the prime enablers for the expansion of the telecom services in the country and yet it is very capital intensive, requiring huge Investments over a long period.
Global trends in the telecommunications industry indicate a shift towards infrastructure sharing. Uganda is no exception, and in the recent past, the sector has moved towards infrastructure sharing models with many smaller operators opting to share infrastructure rather than build their own. This has been eased with the coming into the market of tower operators providing passive infrastructure sharing and companies laying optic fibre. The advent of infrastructure sharing in Uganda has thus far been driven more by the operators’ commercial needs to lower the cost of operation than express Government policy.
Policy and Legal Developments
The National Broadband Policy
The National Broadband Policy seeks to harmonise and regulate the planning and development of broadband infrastructure, enable efficient utilisation of resources, facilitate universal connectivity, affordability, and reform the licensing framework to meet the several overall national policy goals and aspirations.
Number Portability
The National Broadband Policy proposed number portability as an initiative to promote better consumer experience and choice. Number portability enables mobile phone users to retain their phone numbers when changing from one network carrier to another.
Listing of shares
The National Broadband Policy proposes that all national telecom operators should be listed on the stock exchange as a means of reducing the repatriation of capital and enabling the local populace to benefit from the profits emanating from national resources. MTN is currently underway on this.
The National Broadband Policy requires listing for National Operators, UCC proposes that all other operators that do not fall in the national operator category should be required to reserve at least 30% of their shareholding for local ownership.
How Telecom companies currently stack up
The table below shows how the major national carriers stack up with the revised or proposed licensing framework.
| MTN | Airtel | Africell | UTL | |
|---|---|---|---|---|
| National coverage (100%) | ||||
| (a) 2G | YES | YES | NO | NO |
| (b) 3G | NO | NO | NO | NO |
| (c) 4G-LTE | NO | YES | NO | NO |
| Spectrum Management | YES | YES | YES | YES |
| National roaming | NO | NO | NO | NO |
| Number Portability | NO | NO | NO | NO |
| Listing of shares | UNDER WAY | NO | NO | YES |
| Infrastracture sharing | YES | YES | YES | YES |
To achieve the desired outcome, the review process is planned to Circulate on UCC website for comments solicitation of comments from Industry, Public and interested stakeholders between 5th April 2019 to 26th of April 2019. Incorporation of feedback done by 10th May 2019 and adoption of final position by the Commission by 30th May 2019. And finally, by 15th June 2019 UCC will announce the transition period and effective dates for implementation of the new licensing regime.
