The Uganda Communications Commission (UCC) in April this year sent out a stakeholder contribution proposal that considered reviewing the current licensing framework. The review entailed extending the scope of some existing licenses and introducing new license categories to address the emerging policy and industry concerns.
The new licensing framework, which is in line with the new broadband policy, was launched during a half-day event at the Commission’s offices in Bugolobi last week and is based on five core requirements that telecom companies must fulfill before being awarded an operating license. While explaining the new licensing framework to telecom companies, UCC Executive Director Mr Godfrey Mutabazi said;
The new framework, which has been arrived at after a protracted consultative process, will boost investment in the sector and ultimately improve the quality of telecommunications services.
Why UCC changed its licensing framework
- Ease market entry and enhance competition
- Intensify the roll out of broadband Internet
- Enhance local ownership of telecom services
- Promote effective utilization of available resources
- Reduce burden of Operators having to cover the entire country
- Improve Quality of Service (QoS)
Regional licensing map
The requirements for the operators will defer depending on the 5 licensing categories
The new licensing framework structure standardizes and reclassifies the existing and new telecoms into 5 licensing categories viz: National Telecom Operator (NTO), National Public Service Provider (NPSP), Regional Public Service Provider (RPSP), National Public Infrastructure Provider (NPIP) License and finally the Regional Public Infrastructure Provider (RPIP) License. In light of the above information UCC has split Uganda into four distinctive regions.
If an operator covers over 65% of the geographical boundary of Uganda, or operating in 3 regions they shall be legible for a national license in the NTO or National PIP or PSP category. This can apply to MTN, Airtel, UTL and Africell. Operators currently covering less than 65% or operating in less than 3 regions, will be eligible for a regional license. Any operator who currently only holds NTO licenses will continue operating as such in the new licensing framework .
Transition to new regime
As part of the new licensing framework, all existing operators have been given a period of 60 days to re-apply for the licenses they would wish to be granted. The commission will review this application and grant it based on the telecom’s current operational set up.
Every operator will be required to obtain and annual compliance certificate from UCC. All authorizations from the regulator will be for a period of 5 years. UCC pointed out that when an operator obtains two licenses for a different zonal/ regional categories e.g NPSP and RPIP, they will pay the higher of the two values for the respective regions but only once license will be paid.
The 5 core features behind the new licensing framework
But the new licensing framework has 5 core features that UCC seeks to achieve
- Local Listing of shares
- Structured renewal of licenses
- Number portability
- Spectrum Management
- National Coverage
The distinguishing features of the aforesaid licenses are summarized in the table below:
| FEATURE | NTO | PSP | PIP | |
|---|---|---|---|---|
| 1. | Scope of License | (i) Licensed to provide infrastructure services within the boundaries of Uganda (ii) Establish and operate telecommunications services | Regional License Licensed to provide services to consumers in the specified licensed region(s) | Regional License Licensed to provide infrastructure services within the specified licensed zone(s)/ region(s) |
| National Establish and operate telecommunications services nationally (all defined geographic zones) | National Licensed to roll out and provide infrastructure services nationally (all defined geographic zones) | |||
| 2. | Area of coverage | Entire geographical boundary of Uganda and must at a minimum cover and provide service in 95% of this geographical area. | Regional License (i)Provision of services within the license zone (as per defined geographic zones). (ii) Roaming agreements shall be limited to the licensed region. | Regional License Infrastructure rollout and provision limited to license zone (as per defined geographic zones) |
| National Entire geographical boundary of Uganda | National Roll out and provide infrastructure across the country | |||
| 3. | Spectrum Allocation to be determined by technical plan and area of coverage | Will be eligible for national allocation based on expansion /development plan, legal and regulatory framework, public interest and availability of the respective resources. | N/A | Eligibility shall be based on licensed region (s), subject to availability, and upon consideration of expansion /development plan, legal and regulatory framework and public interest. |
| 4. | National Roaming and Infrastructure sharing | (i) Obligatory to host and/or provide infrastructure services to PSP for regional and national rollout of services within their respective licensed zones (ii) Obligatory to host and/or lease to or from National operator and or PIP for network rollout and provision of infrastructure within licensed zones. | To obtain infrastructure services from NTOs and PIPs in licensed areas | To lease to and lease from NTOs and PIPs for the rollout of infrastructure in licensed zones |
| 5. | Listing on Stock Exchange | Shall be required to list at least 20% of its shares on the Uganda Stock Exchange within two (2) years from the date of grant/ issuance of license. | 20% of local ownership | 20% of local ownership |
| 6. | License duration | 15 years | 5 years | 15 years |
| 7. | Compliance Certificates | Annual | Annual | Annual |
| 8. | License Fee | License renewal/Grant fee of 2% of the Licensee’ Projected Gross Annual Revenue for either 15 or 10 years depending on the choice of the applicant. | National 2% of the licensee’s projected Gross Annual Revenue for 5 years. | Regional License 2% of the licensee’s projected Gross Annual Revenue for 15 years. |
| National 2% of the licensee’s projected Gross Annual Revenue for 15 years | ||||
| 9. | Annual license fee | 0.25% of the Gross Annual Revenue or USD 50,000 whichever is higher | PSP Voice & Data 0.25% of the Gross Annual Revenue or USD 20,000 whichever is higher PSP Capacity Resale 0.25% of the Gross Annual Revenue or USD 5,000 whichever is higher | National 0.25% of the Gross Annual Revenue or USD 30,000 whichever is higher Regional License 0.25% of the Gross Annual Revenue or USD 10,000 whichever is higher |
Reactions to the new framework
In reaction to the above features ,there were some concerns from the public and also telecom operators who feared that the new licensing framework could disrupt the sector and result into over regulation. Most operators were opposed to the fee increment since they are already paying many other taxes and the fear that changing licenses might adversely affect the rights of existing operator’s licenses.
Most Operators also warned UCC against implementing Number portability as it has failed in many other African countries like Nigeria. They however welcomed the proposal of infrastructure sharing and also welcomed the idea that UCC should crackdown on spectrum hoarding and speculative investors.
