Is govt set to rein in high cost of internet?

What is the backstory to the reduction in the price of the internet?  

On August 1, the central government announced a reduction in the price of the internet. This has raised expectations among the users that they could get a reprieve from Uganda’s internet prices, which are among the highest in the region. 

Although access to the internet can be a key cog in turning around the economic fortunes of the country as it facilitates improved productivity of firms, workers, and other inputs in the production process, a 2022 research by Surfshark, a cybersecurity company headquartered in the Netherlands, showed that Uganda’s internet is one of the most expensive in the world.  

The research indicated that Uganda’s internet affordability ranks 116th of 117 countries surveyed in the world.

To put matters into perspective, the research showed that though Uganda is one of the poorest countries in the world, Ugandans have to work 510 times more (41 minutes and 50 seconds/month) than Israeli citizens, for whom the most affordable 1GB package costs only 5 seconds of work monthly.  

What does the reduction in the cost of the internet look like and the attendant impact?

When the Information Communication Technology and National Guidance minister Chris Baryomunsi announced that effective August 1 the price of the Internet has reduced from $70 to $35 per Mbps (megabytes per second) per month, the National Information Technology Authority (NITA-U) was not to be denied its moment in the sun. 

NITA-U’s objective is to provide high-quality information technology services to the government. The biggest question, however, is whether the internet price reductions by the government will compel the private Internet Service Providers (ISP) to ditto. It is from these ISPs that most Ugandans get internet access.

The straight answer is that those that get internet access from private ISPs won’t see any change soon in the prices of their data.    

In an interview, Hatwib Mugasa, the executive director of NITA-U, explained that the cuts in internet prices would only directly impact ministries, departments, and agencies (MDAs).

This is essentially what Dr Bayromunsi told journalists midweek. Private ISPs cannot be compelled to follow the government’s lead.

What sort of track record does the Uganda government have when it comes to internet access?

A ropey one, it must be said. It has previously deployed internet shutdowns and network disruptions to quell mass protests and rhetorical refusals during general elections. 

Before that, in 2018, the government rattled the sector by introducing an Over-The-Top (OTT) tax that required users to pay a daily levy of Shs200 to access more than 50 platforms, including Facebook, Twitter, and WhatsApp.

In implementing the tax, the Finance ministry was following a directive from President Museveni who said there was a need for social media tax in a bid to curb lugambo or gossip on social media.  

He also admitted that it was a potential source of revenue. Virtual Private Networks or VPNs and wireless networks, however, had other ideas. Ugandans managed to evade paying OTT.  

In 2019, the taxman said it had collected a paltry Shs49.5 billion out of the projected Shs284 billion. While the 17.4 percent performance was a damning indictment, the OTT had already inflicted lots of damage. It whittled down the number of internet users in the country by 30 percent. 

Statistics from Uganda Communications Commission (UCC), the government media regulator show that more than three million internet users dropped off during the first three months of execution.

In fact, few were surprised when the government dropped OTT in 2021. It instead introduced a 12 percent tax on internet data, a move that pushed up the cost of the internet. 

“Internet prices in Uganda have been high and that impedes development. That’s why we are trying to ensure that they come down,” Mugasa said, adding, “In the past, we have seen that when we cut prices of the fibre cable internet the private sector reacts by decreasing the prices.” 

As things stand there is no empirical evidence to prove that indeed end users will have cheap internet. Technocrats nevertheless hold that the latest move comes with indirect benefits for end users.  

“The first indirect benefit is that the prices that [the] government is providing will become affordable to ordinary citizens,” Mugasa said.

“At NITA-U we’ve been working hard to consistently lower the cost of internet bandwidth in Uganda especially for government institutions since they provide onward services to ordinary citizens and the private sector. We are happy that we have maintained our long-term plans to lower bandwidth prices.” 

How has NITA-U fared insofar as extending National Backbone Infrastructure is concerned?

In his speech this past week, Dr Baryomunsi hailed NITA-U for expeditiously implementing the first phases of the National Backbone Infrastructure project (NBI) to serve as the primary vehicle for all government data, Internet, and voice services. 

The first phase of the NBI saw connectivity (168 km of optical fibre cable), linking the towns of Entebbe, Mukono, Jinja, and Bombo to Kampala, including 27 MDAs, completed. The second phase includes the completion of 1400.734kms of optical fibre cable, connecting Busia, Tororo, Mbale, Malaba, Kumi, Soroti, Lira, Gulu, Elegu, Masindi, Kyenjojo, Fort Portal, Kasese, Bushenyi and Mbarara. 

Yet the Auditor General has in previous reports poked holes in the erection of the NBI, saying only 445 of the envisaged  20,000 sites are connected to the system.

The Auditor General also pointed out MDAs continue to shell out astronomical amounts of money on alternative internet service providers on the grounds that NBI leaves a lot to be desired.

Mugasa denies the accusation that the NBI provides low-quality internet. He nonetheless admits that a number of MDA aren’t using the infrastructure.  

“We are working with the Ministry of Finance to ensure that all MDAs that have budgets for the internet procure it from here.

We have a Cabinet directive, which is to the effect that all MDAs shall utilise National Backbone Infrastructure as their primary source of internet,” Mugasa said, adding that the project is a work in progress since they can’t connect to all MDAs across the country.

He further revealed: “We started out in Kampala and surrounding areas, but once we cover the country more government offices will be part of the NBI.”

Will private Internet Service Providers also reduce the cost of internet service?

Hatwib Mugasa, the executive director of NITA-U, advises the private sector to start buying internet from NITA-U since they now have the cheapest internet rates. 

“We are going to engage the private sector because we have built enough capacity. They should take advantage of the reduction in these prices by buying internet from us,” he told Monitor in an interview.       

The high cost of the internet has been attributed to high operating expenses for service providers. Telecoms must build or lease infrastructure to connect the country to the fibre cables on the Indian Ocean coast and deliver the data over a 900km route into the country. 

“We buy internet from those who have the cheapest prices on the market,” Mr David Birungi, Airtel Uganda’s public relations manager, said without committing to buying internet from NITA-U.