The Inaugural Uganda Telco – Forum

This is an abridge version of remarks by the Executive Director – Uganda Communications Commission Mr Godfrey Mutabazi during the inaugural Uganda Telco – Forum

Mr Mutabazi expressed great pleasure that the Commission hosted C-Suite Executives of the Mobile Network Operators as well as selected Fin-techs at the inaugural Telco-Forum. The forum is aimed at improving engagement, sharing experiences and learning and reflecting on what has worked, what has not worked, and recommendations for policy direction.

Mr Mutabazi used the opportunity to remind guests that the telecommunications remains one of the fastest changing sectors of our time and has on average been wildly re-inventing itself every 18 months over the last ten years with wave after wave of technology and consumer behavioural changes.

Mutabazi invited guest to think about the 2G technology that has been leapfrogged by 3G and then later by high-speed 4G/LTE networks. Globally, the debate has since shifted to 5G deployments with markets like the UK and China already discussing 5G strategies. He noted that telecom traffic is migrating from traditional voice traffic to data-centric consumption patterns even in markets like ours, where smartphone penetration lags behind global averages.

To appreciate the changes in the Communication space and the effect of technology convergence, Mutabazi invited guests to take a closer look at telecommunications, finance, commerce, and entertainment where the lines continue to get more blurred.

He noted that a SIM card now provides a one-stop window for payments, communications, social networking, as well as multimedia entertainment. OTTs and Freemium business models are now a mainstay in our market, challenging traditional pay-per-use and subscription business models. As a result, there is continuous effort to re-invent Network sharing, Roaming, and interconnection models to survive.

Amidst this disruption, Mutabazi says that it is also crucial to acknowledge that the telecommunications sector has achieved significant successes contributing to the improved social and economic landscape across all other sectors in the country.

For example, he says that services are available to at least 90% of the population, serving a customer base of more than 25 million subscriptions. This is arguably more than 95% of the total addressable market.

Mutabazi noted that the telecom sector has consistently emerged as a top tax paying sector contributing UGX 675 Billion in the FY 2017/18 translating into 8% of total domestic net revenue collections. This tax contribution has consistently surpassed traditional industries like mining and banking he emphasised.

“The sector has practically re-invented fields like banking by growing the number of registered mobile money accounts to 25 million in the last five years served by an army of more than 195,000 agents. This sector has reinvented the world of person-to-person money transfers and utility payments” he said. Agencies like NWSC and UMEME have since closed field cash offices while banks continue to roll out e-banking channels, thus remaining a key financial inclusion driver in the economy Mutabazi emphasised.

It is often not mentioned that the telecom sector has consistently maintained retail price increases below national inflation figures for the last ten years. This is despite price increases for key inputs like fuel and the continued local currency depreciation against the dollar the speech reads in part.

The sector has inadvertently changed the face of governance and administration through the creation of credible, verifiable Digital Identities for tax collection, accountability systems and urban planning. In the private sector, SIMcard-based identities are being leveraged to disrupt sectors like insurance, microcredit as well as e-commerce. It can not equally be ignored that this sector has also made national security interventions like supporting criminal investigations, on-the-spot penalties for offenders, thereby improving efficiencies in the security deployments.

The CSR contributions from the sector with initiatives spurning a host of societal challenges that include; education, sport, health and sanitation with an output of an estimated UGX 15 Billion in CSR in 2018 alone is, to say the least impressive.

Mutabazi also acknowledging that this sector has provided leadership in the reduction of regional trade barriers through efforts like the regional One Network Area roaming partnership as well as cross-border ICT initiatives.

However, it may sometimes appear that these achievements are taken for granted, and this success may, unfortunately, sometimes had some unintended consequences. It is undeniable that the sector has emerged as an easy target for government revenue mobilisation. We have seen several local government levies, taxes and statutory payments significantly increase in the last five years. These have long term effects on the rollout of affordable universal services.

He noted that there have been new obligations in the achievement of national security objectives. These come with onerous capital and human resources requirements from operators, and yet on the same front, the sector has become a target from criminal elements perpetuating new forms of electronic and cyber fraud. The European Cyber Crime Center has estimated that global cybercrime costs the industry an estimated USD 32 Billion annually

To make the most of the sector’s privileged position in the economy while addressing nascent threats and negative consequences of its success, Mutabazi advised that regulatory interventions & lobby efforts have to be grounded in regular open dialogue. However, a unified position on these threats and challenges would mitigate further consequences and unfavourable policy decisions that affect the sector. This would further enhance industry expertise in the advancement of the sector.

We all have noted achievements in the banking, insurance and even broadcasting sectors resulting from unified stands on matters delivered through their associations, Mutabazi noted. We, therefore, hope that in the short term, this engagement will lead to a similar unity platform or association, and the Commission is committed to supporting such a joint force when required. We further aim to invite other sector players supported by telco services, including banking, insurance, energy, security etc. where successes of this sector can be highlighted.

Some of the areas that will make part of the resolutions from the discussions include; Developing a One Network Area fair usage policy; Progress the discussion on permanent roamers; Revisit the 9 cents of a dollar charged on international calls and compare practices and procedures in the region; Consider harmonisation of taxes across the One Network Area.

On the discussion on combating identity and traffic fraud; operators will share best practice on identification and combating fraud; Address distribution network loopholes; strict monitoring of multiple SIM ownership; and more.

It was great deliberation, and Mr Mutabazi thanked the Chief Executives and representatives from Africell Uganda, MTN Uganda, Airtel Uganda, Uganda Telecom, Tangerine, Smile Communications, Sombha, Roke telecom, Simbanet, Liquid Telecom and the Financial Technology Service Provider’s Association (FITSPA). The recommendations will be communicated for action among stakeholders.

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