New licensing framework to determine which telecom lists

A new framework, whose public has been undergoing, will determine which telecom lists on the Uganda Stock Exchange (USE).
According to the telecommunication licensing consultation paper drafted by Uganda Communications Commission (UCC) in April, only telecoms holding a national telecom operator will be required to list.
However, the proposal is subject to outcomes of the consultations currently being conducted.
“A national telecom operator shall be required to list at least 20 per cent of its shares on the [USE] within two years from the date of grant or issuance of licence,” the framework proposes.
Currently, only Uganda Telecom and MTN hold the national operator’s licence.
Airtel currently operates on a public service provider (PSP) and Public infrastructure Provider Licence (PIP).
Whereas MTN and Utl would be required to list, in the proposed framework, Airtel, currently, a public service provider would only need to have 20 per cent local ownership, which gives it an alternative of either listing or offering 20 per cent of its shares to a Ugandan.
The proposed framework seeks to address new developments in the communications industry, taking into account the Spectrum Management Guidelines, changes in policies such as listing of telecoms on the stock exchange as required by the September 2018 National Broadband Policy.
However, the odds might be against Airtel as government now seeks to make it national telecom operator.
In a telephone interview last week, Mr Abdul Waiswa, the UCC head of legal affairs, told Daily Monitor that Airtel, according to the proposed framework would be eligible for a national telecom operator licence.
“Yes, it [Airtel] will become a national telecom operator. So the evaluation we are doing is to assess every operator and fix them within the proposed licence framework,” he said, adding Airtel has been holding a PSP but by operation they are more or less like MTN and UTL.
Airtel, he said, is currently covering the entire country and has many subscribers, so it is important that they extend their networks to the sub-counties as required under the national telecom operator guidelines.
This means Airtel has for years enjoyed competitive advantage in regards to licence fees since PSP pay lower licence fees compared to national telecom operators.
“It is not fair that one of two equally big operators pays for a national telecom operators licence while the other pays for a public service provider,” Mr Waiswa said adding the new framework seeks to create parity and harmonise the telecommunications sector.
UCC, the proposal says, shall inform every operator of the license category they hold based on capital adequacy, number of years in operation, resource utilisation and extent of coverage.
The operator will, however, be given a 30-day window to object or agree to the licence category.

Companies with Small spectrum-reach could be sandwiched

The framework also proposes a diversified investment atmosphere for people in the telecom sector to allow regional and national operators across all fields.
However, operators, who cover less than 65 per cent of the country or operating in less than three regions, will be eligible for regional licences meaning they will only be allowed to operate in designated regions.
This could swallow up companies such as Smart, Smile whose coverage is mainly in the central region.
Mr Waiswa also said UCC will consider resources such as the spectrum, a definite resource used to extend services to different areas.
Regional companies will only be given spectrum to extend network to specific regions to curb hoarding.
Whereas the framework intends to bring new investors in the market, for instance infrastructure providers on whose investments telecoms can spread their network, Mr Micheal Niyitegeka, Africa country director for Uganda International Computer Driving Licence says more needs to be done to incentivise investors to extend investments in areas that do not make business value.
He advised government to invest in educating Ugandans about Internet usage beyond social media to drive up subscriber numbers which will drive appetite for investment.

License cost

Cost details: National telecom operators will be required to pay 2 per cent of the their projected gross annual revenue for either a 15 or 10-year licence while public service providers will pay 2 per cent of their projected gross annual revenue for a five-year licence.
Framework to delay. UCC, which had been expected to reveal final details of the telecom licensing framework on June 15, says it might delay because of approvals and further scrutiny in final decision making.