New telecoms investors will be forced to share infrastructure in Uganda

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Uganda Communications Commission (UCC) said new investors in telecommunications services will be forced to  rent capacity from existing fibre optic cables in Uganda, rather than lay their own, to curb infrastructure duplication and lower internet access costs.

In recent years, the East African country’s telecoms sector has attracted foreign investors. This can be attributed to the country’s rapid economic growth, young population and general political stability. The requirement for infrastructure sharing is part of a new national broadband policy that seeks to boost efficiency and extend high speed internet access to the population.

CEO of regulator UCC, Godfrey Mutabazi told Reuters that “we need infrastructure sharing, if we already have cables in an area, don’t put there another one so that we don’t duplicate these things”.

Mutabazi noted that exemptions will be made for investors who target sparsely populated rural areas, as they will be allowed to lay cables to boost the spread of internet access. He said Uganda has about 12,000 kilometres of fibre-optic cable laid and new investors will rent capacity at agreed commercial rates.

According to Mutabazi, laying of separate cables by different telecoms firms has resulted in high costs for erecting and maintaining the infrastructure, under-utilisation of capacity on the cables and high internet costs.

MTN Uganda, a unit of South Africa’s MTN Group, which is the largest telecoms operator in the country has a cable network that lies alongside those of Bharti Airtel, and American technology giants Google and Facebook. The Ugandan government also operates a national broadband internet cable network developed with a Chinese loan.

Kyle Spencer, Executive Director of Uganda Internet Exchange Point (UIXP), a non-profit organisation that interconnects data from one operator’s cable to others, told Reuters the new policy would create infrastructure monopolies, which will eventually hamper the sector’s development and cut jobs.

Spencer said “the market has worked”, revealing that bandwidth costs in Uganda had declined from $5000 per megabyte per second in 2009 to the current $10 per megabyte per second.

He said “the system is not broken and the reason that (price decline) has happened is because there’s been significant amounts of competition in infrastructure and service”.

 

 

 

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