Lawmakers, regulators urged to act fast on emerging monopoly in telecom market

The Alliance Against Monopoly (AAM), a Pan-African anti-monopoly group has called upon regulators and lawmakers to act fast and suppress the emerging monopoly and duopoly in Uganda’s telecom industry.

The group warns that the monopolies and duopolies are slowly but surely choking the country’s ICT sector, stifling innovation and reversing the gains of the past two decades.

This comes at the backdrop of Uganda National IT Survey 2022 Report by NITA-U which showed that the cost of access, was the single-largest inhibitor of internet connectivity for a majority of Ugandan businesses, households and individuals.

Dr. Omife I. Omife, AAM’s Continental Advisory director, said that it is time lawmakers and regulators move in fast and cut the monopolistic hydra, whose tentacles he says continue to block innovation and competition.

According to the NITA-U Report, household-level internet access is still severely limited, with 94% having no access at all across the country, with a wider urban-rural divide.

The report further shows that 37% of households without access cited the cost of access being too high, while 48% cited the cost of the equipment being out of reach.

The NITA-U study also comes on the heels of another study, the Surfshark 2022 Digital Quality of Life Index that showed that Uganda (116th) is home to the second-most expensive internet in the world, after Ivory Coast (117th).

The company, also noted that countries with the most expensive internet also tended to be the least stable with Uganda being ranked 110th out of 117 countries in internet stability.

Omife says the 4th industrial revolution is here and has been here for a decade and that this technological revolution that is fundamentally altering the way we live, work, relate and do business with each has connectivity to the internet as its core.

“The countries that invest significantly in affordable, stable and quality internet access for its population especially the youths, educational institutions and its businesses will be strategically positioned to outpace their peers and emerge as the next powerhouses,” said Omife.

Omife added, “Unfortunately for Uganda, this opportunity could be squandered or may be slowed down by an emerging profit-first monopoly by a few players, who are making it difficult for businesses, schools and households to have access to life-changing affordable internet,”

He noted that the internet, like other vital resources and infrastructure such as water, energy, healthcare, education and transport must be delicately protected, from the excesses of capitalism.

He said that it is high-time legislators and regulators take a keen interest in the regulation of the communications sector; both the consumer-facing telecom operators and the below-the-line communications infrastructure providers both of whom greatly contribute to the end-user cost and experience.

“Over the last decade, market mergers in Uganda and the region have created a potentially dangerous ‘cartel’, made up of one dominant tower provider with 90% control of the market and two telecom providers with about 95% of market share. These wield so much power over the market, bordering on regulatory capture, that it has become difficult for any new players to penetrate the market and provide the much-needed innovation and competitive pricing,” Omife argues.

He also specifically called on legislators and regulators to scrutinise the deleterious merger plan between American Tower Corporation (ATC) and Eaton Towers being considered by the COMESA Competition Commission saying that the plan which grants ATC Uganda 90% control of the tower market, which he said is “killer grits of monopoly that will be detrimental to the overall interest of Uganda”.

“We would like to urge parliament and relevant agencies of government not to discard the numerous reports of infractions and breach of contracts by industry players as to do so will militate against the economic development of Uganda,” he said.