Under utilisation of govt Internet pushes up costs

Tuesday February 11 2020

A man  browses Internet on a smartphone in

A man browses Internet on a smartphone in Kampala. The cost is still high partly due to the under utilisation. PHOTO BY EDGAR R. BATTE 

By Christine Kasemiire

In 2017, government announced the free wifi that would be in Kampala and surrounding areas. It was to be implemented by National Information Technology Authority - Uganda (NITA-U).

NITA-U procured 10Giga bits per second (Gbps) upstream internet bandwidth under an indefeasible right to use arrangement. This means the Authority cannot undo its purchase agreement.

But currently, 50 per cent of this capacity is commercially utilised with the rest offered as free WiFi.

The Auditor General warns in his latest report that this increases the cost for the Authority.

“This has contributed to the high cost of the internet bandwidth as the sites which use the 50 per cent subsidise the WiFi offered for free,” the report noted urging government to expedite the last mile connections in the pipeline and also involve the private sector in the uptake of this bandwidth.

Nita-U currently sells internet to some private telecommunication companies in the market.

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Cost of the internet
NITA-U buys upstream internet bandwidth at a cost of $2.6 (Shs9554) Mega bit per second (Mbps) per month and sells to users at a cost of $70 (Shs257,240) Mbps per month.

Internet bandwidth can be defined simply as the capacity of an internet connection.

The selling price, the report says, is driven by maintenance costs, cost of upstream bandwidth and the non-tax revenue transferred to Treasury.

The cost is still high partly due to the under utilisation, maintenance costs and the high cost for the upstream bandwidth.

However, 50 per cent of this cost is transferred to the Uganda Consolidated Fund as Non-Tax Revenue.

The Auditor General therefore advised that this cost can be driven downwards if government makes a deliberate effort to increase uptake by users and implements a policy for shared infrastructure services to lower maintenance costs.

In addition, Mr Muwanga notes, if the government revenue portion of $35 (Shs128,000) Mbps is waived, the cost can come down by 50 per cent.

Meanwhile, he faulted government for duplication of internet infrastructure saying it is money ‘not’ well spent.

In the report, it was revealed that NITA-U and Uganda Electricity Transmission Company Limited (UETCL) have installed optic fibre in the same route noting that there was no coordination.

“A review of the harmonisation map of the optical fibre network in the country revealed that NITA and UETCL were building identical infrastructure on the same routes, such as in Kampala, Malaba, Mbarara, Kasese, Tororo and Karuma,” the report reads in part adding that this leads to double funding and increases the country’s debt burden.

UETCL was permitted by Uganda Communications Commission to install fibre on which private operators can leverage to transmit telecommunication services.

NITA-U, is mandated to extend the country’s national backbone, otherwise known as internet infrastructure to ensure government enterprises are digitised.

Uganda, Mr Muwanga said, has invested heavily in the extension of optical fibre network across different parts of the country under the National Backbone Infrastructure/ e-Government Infrastructure project using funds from external borrowing close to $106m (Shs389b) for Phases I, II and III and $85m (Shs312b) on phase IV.

In addition, the report highlighted that multiple government agencies investing in the optical fibre network will lead to underutilisation and increased borrowing by the agencies to fund the infrastructure. It would also increase government’s maintenance costs of the network.

This comes after government passed the national broadband policy which, among other things, seeks to reduce duplication of infrastructure by telecom companies.

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