MTN and Airtel say the new deal to share network infrastructure targets improved network cost efficiencies, expanded coverage, and the provision of enhanced mobile services. Photo / Edgar R Batte
After a careful study spanning more than three years, which stretched into 2020, Uganda Communications Commission (UCC) concluded that the attendant high investments in infrastructure were target-limiting and stood in the way of achieving affordable internet connectivity and related telecom services
The study found that beyond the need to expand existing infrastructure, there was need to mitigate duplication of existing optic fibre deployments to ease the “high cost of ownership for communications infrastructure operators, which was feeding into high cost of bandwidth and ICT services generally”.
“The Commission [UCC] recognises that construction, operation and or maintenance of communications infrastructure is typically very costly, and leasing of communication network infrastructure currently accounts for a significant portion of overhead costs of a typical service provider … thus there is need to have a comprehensive framework … to ensure sharing and complementarity of broadband networks to avoid duplication in deployment of infrastructure,” details contained in the background to the UCC Guidelines on infrastructure deployment and sharing read in part.
Thus, based on the findings of the study, in 2021, UCC developed guidelines that would regulate, coordinate, and harmonise the development, deployment, and sharing of broadband infrastructure (both private and public), with the ultimate objective of bringing down the cost of telecommunication services.
The guidelines, among others, as already indicated, sought to facilitate coordination and collaboration among different stakeholders for joint construction, co-location, sharing, and access to existing networks and roll-out of new ICT infrastructure, but also minimise the cost of civil works and associated social costs such as traffic congestion, and impact on roads, promote market efficiency in the provision of communications infrastructure and services, and encourage a strategic forward-looking approach to provision of communications facilities.
At the centre of the push was Ms Irene Kaggwa, who as former acting UCC executive director, and now working with International Telecommunications Union, sought to implement a long term strategy, through which, telecommunications services consumers would access services at affordable rates.
“We pushed this to reduce the cost of provision of services to consumers and improve coverage and quality of service through leveraging each other's network for reach and reliability,” she said yesterday.
Whereas the real benefits of the guidelines could have been delayed for over three years, the ball is now in sight with telecoms now agreeing that it is no longer financially feasible to dig up kilometres of trenches to lay fibre cables in an area where another telecom or government has existing supply.
On the whole, the policy seeks to achieve low and affordable telecommunications services. However, for now, the concentration has been put on internet infrastructure.
The infrastructure sharing agreement seeks to bring down the cost of telecommunications services. Photo / Edgar R Batte
On Wednesday, MTN Group and Airtel Africa, both of which operate subsidiaries in Uganda, announced they had entered into agreements to share network infrastructure, targeting improved network cost efficiencies, expanded coverage and provision of enhanced mobile services.
Mr Ralph Mupita, the MTN Group chief executive officer, said there “were opportunities within regulatory frameworks for sharing resources to drive higher efficiencies and improve returns,” while Sunil Taldar, the Airtel Africa chief executive officer, on his part noted that “as we compete fiercely in the market … we are building common infrastructure” that would prevent “duplication of expensive infrastructure to drive operational efficiencies and benefits for our customers”.
The announcement was a new one in so many ways in a market, in which, the two telecoms have fiercely competed in both conventional and unconventional ways.
To outsiders, especially subscribers who, for a long time, have been the pawns in the battle for supremacy, a joint statement reading; “MTN Group and Airtel Africa are dedicated to working with other mobile operators … to achieve the advantages of network sharing” had always been an alien thought that they never saw coming. However, the realities of the market and global dynamics have forced a relationship that a few years ago would never have happened.
The two telecoms - MTN and Airtel - share between them a market share of more than 95 percent in all major telecommunications and financial services that include voice, data and financial technology.
UCC data indicates that Uganda, as of December 2024, had 51 million mobile phone subscribers, 50.5 million mobile money lines and 19.5 million subscribers, all of whom depend on the deep pockets of their service providers to receive efficient and reliable connectivity.
Infrastructure, which continues to change due to constant shifts in technology, remains largely capital intensive, and according to UCC’s background to the infrastructure sharing guidelines, “accounts for a significant portion of the overhead costs of a typical service provider in the communications sector”.
For instance, in the period ended December 2023, MTN, according to its sustainability report, invested Shs353.5b in its infrastructure, which was an increase of 5.5 percent.
Airtel equally spent around the same amount in upgrades and setting up new infrastructure in areas where, perhaps, MTN had coverage.
Thus, Mr Ibrahim Bbosa, the UCC head of public and international relations, says MTN and Airtel’s new direction, in which the two will share “both passive and active infrastructure, is a strategic move that promises to reduce investment costs and expedite the achievement of coverage obligations”, and will ultimately enhance customer experience.
“We will closely monitor the implementation to ensure that it does not lead to any adverse effects on competition in the market. Our goal is to safeguard the interests of consumers while encouraging innovation and collaboration among operators,” he says.
On his part, Mr David Birungi, the Airtel communication and corporate affairs manager, says the finer details of the partnership were being worked out, “but what has been agreed upon is the principle of reciprocal sharing of infrastructure starting with fibre”.
“It means that if one operator is already in location A, and the other operator is in location B, then they can latch on each other's network without the need to dig up afresh. This is a developing story that we believe will transform the sector in a big way,” he said.
Growing global trend
Initially, MTN and Airtel Africa indicate that the network sharing initiative, which is part of a growing global trend toward network sharing, will first be implemented in Uganda and Nigeria, with the view of extending it into other markets where the two have operations.
In a joint statement on Wednesday, MTN and Airtel said that by collaborating, telecom operators could explore innovative and pro-competitive solutions to improve service quality while managing costs more effectively.
“The sharing of infrastructure has the potential to enable the delivery of world-class, reliable mobile services to more and more customers across Africa,” the statement noted.
MTN and Airtel Africa will also explore various opportunities, including infrastructure sharing in other markets such as Congo-Brazzaville, Rwanda and Zambia
