August 11, 2005
New Players in Uganda Telecom Market
The exclusivity period that the government granted to MTN and Uganda Telecoms Ltd as the national mobile phone operators ends this month, reports Mobile Africa.
"This will allow new players in the market and mostly likely hot up competition in the sector. The new developments will come at a time when Uganda's recent phenomenal growth in mobile telephony is being touted all over the world.
Citing a recent study by London Business School, the Economist magazine said last month that, "in a typical developing country, a rise of ten mobile phones per 100 people boosts GDP growth by 0.6 percentage points."
Unfortunately, despite the rapid subscriber growth in Uganda in particular and Africa in general in recent years, only a small proportion of people own mobile phones.
Broader adoption of mobile phones has been severely constrained by the high price of handsets, as well as the high taxes and duties imposed on both handsets and airtime. Recently, for instance, the government increased excise duty from 10 percent to 12 percent and VAT from 17 percent to 18 percent.
Effective July 1, the three mobile operators increased their rates, saying they were unable to continue absorbing taxes levied on airtime.
While it is arguable whether the new increases were entirely justified, it is contradictory that a government that claims improving universal access is a major goal of the national ICT policy decided to levy such high taxes on telecom operators and users."
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