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December 14, 2018

Uganda to make new telecoms investors share fiber optic infrastructure

An engineer fixes internet cables in Mombasa. /FILE
An engineer fixes internet cables in Mombasa. /FILE

Uganda will force new investors in telecommunications services to rent capacity from existing fibre optic cables, rather than lay their own, to stem infrastructure duplication and lower internet access costs, the sector regulator said on Tuesday.

The East African nation's telecoms sector has attracted foreign investors in recent years due to rapid economic growth, a 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.

"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," Godfrey Mutabazi, CEO of regulator Uganda Communications Commission (UCC), told Reuters.

Exemptions will be made for investors willing to lay cables in sparsely populated rural areas to boost the spread of internet access, he said.

Uganda has about 12,000 kilometres of fibre-optic cable laid, according to the government, and new investors will rent capacity at agreed commercial rates, Mutabazi said.

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

The largest telecoms operator, MTN Uganda, a unit of South Africa's MTN Group has a cable network that lies alongside those of Bharti Airtel, and American technology giants Google and Facebook.

The government also operates a national broadband internet cable network developed with a Chinese loan.

There are about 24 million mobile phone subscribers in Uganda and an estimated 17 million internet users, UCC said.

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 stance was retrogressive and would create infrastructure monopolies, hampering the sector's development and cutting jobs.

He said bandwidth costs in Uganda had declined from $5000 per megabyte per second in 2009 to the current $10 per megabyte per second.

"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," he said.

"The market has worked."

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