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Govt supports Muhakanizi proposals on UTL revamp

The UTL business centre in Kampala

Kampala, Uganda | THE INDEPENDENT | Uganda has stepped up the search for an investor to revamp Uganda Telecom Limited (UTL), with Cabinet approving a proposal by the Ministry of Finance to provide a range of incentives to attract competent bids.

“Cabinet agreed to and approved the proposal by the Ministry of Finance to get a competent investor to invest in UTL,”  said Frank Tumwebaze, the minister for ICT and National Guidance at a briefing on Cabinet issues on Wednesday.

Among the incentives to potential investors, Cabinet has asked Uganda Communications Commission (UCC) to allow UTL to expand its Frequency Bandwidth (spectrum) so long as it can prove that it will use it efficiently to cover the whole country and provide better quality service.

The Uganda Telecom service license for UTL will also be extended by 20 years after it gets a competent investor to upgrade its network. In addition to this, ” UTL or the resultant entity will be the preferred provider of internet services to all ministries, departments and agencies of government,” said Tumwebaze

Cabinet under the chairmanship of President Yoweri Museveni on Monday  also agreed to guarantee UTL unlimited access and use of the National Backbone Infrastructure (NBI) to enhance Government shareholding to a range of between 32% to 45%.

Tumwebaze told the press that the Minister of State for Investment has been authorized to work with the Financial Intelligence Authority to vet the capacities and record of the various prospective investors that had already submitted in their expressions of interest.

Muhakanizi’s directive

Last year,  Permanent Secretary in the Ministry of Finance, Planning and Economic Development Keith Muhakanizi was embroiled in a battle with the Ministry of Information, Communication and Technology and National Guidance over a directive for the government entities to use only UTL services.

In a letter dated Sept. 14, Muhakanizi directed all Government Ministries, Departments and Agencies (MDAs) to procure mobile phone services including internet from UTL. He also instructed all government entities that still owe UTL money to clear the outstanding amounts immediately, failure of which they will not receive funds for the second quarter of FY 2017/18 until the payments are made.

Muhakanizi had argued that the decision was intended to ensure that the price of telecommunication services especially internet reflects that of its neighbouring countries – Kenya, Tanzania and Rwanda.

“What I am fighting is for the government to buy internet services at a lower price and also ensure that the service providers (in this country) brings down the price of internet,” he said, “I will fight this war and I will win.”

He said internet service providers in Uganda were charging clients as high as US$300 per megabit per second per month yet their counterparts in the region are charging below US100 per megabit per second per month.

“I think there’s something wrong (in this country) and that is the war aim fighting,” he added, “If NITA wants us to buy their internet, let them lower their prices and there will be no need for us to go to UTL.”

The Ugandan government buys its internet services through the National Information Technology Authority (NITA) at $190 per megabit per second per month, according to the Authority’s Executive Director, James Saaka.

He, however, said they were ready to hold talks with the finance ministry on how to lower their price of internet and possibly partner with UTL.

Muhakanizi says UTL had agreed to connect all the ministries departments and agencies at US$100 per megabit per second per month.

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