UCC answers taxation, sovereignty concerns as Starlink gets license

Kampala, Uganda | URN | As satellite internet service, Starlink prepares to commence operations in Uganda, there are questions about how much of a physical presence the SpaceX subsidiary will have in the country, especially for taxation purposes and security concerns.

In December last year, the government conducted a crackdown on Starlink services and equipment in Uganda saying they were being used outside the regulatory framework.

At the same time, the Uganda Revenue Authority said no equipment would be allowed into the country without the clearance of the Chief of Defense Forces. In January, Starlink explained that its equipment and services had been imported into the country illegally as it had not been licensed by the authorities.

Willard Shoko, a researcher and consultant with Starlink says Uganda will be getting a Ground Station as per the agreement with the regulators. A physical presence will then enable the physical contact between the UCC as a regulator, Uganda Revenue Authority and security overseers in the country.

“The key measures incorporated within the Starlink licensing conditions include a national gateway with a physical point of presence in Uganda, where traffic for Ugandan users must route through local infrastructure, enabling lawful interception, monitoring, and compliance with national laws,” says Shoko, adding that this is in alignment with the Data Protection and Privacy Act.

Starlink has secured both an infrastructure and service provisional licence that will enable the company to operate satellite services in Uganda.

It also permits them to share their infrastructure with other licensed operators through commercial agreements that will enable these operators to expand their existing services across the country, particularly in unserved and underserved areas.

UCC Executive Director Nyombi Thembo says in negotiations with Starlink, government and UCC stressed the importance of revenue assurance and compliance with Uganda tax laws as a core condition of the firm’s entry into the market, as it is locally registered.

“Starlink committed to paying all taxes due to the Government of Uganda in parity with other licensed operators.”

The taxes are those that are paid by the other internet service provider corporations, including the Corporate Income Tax, VAT, Excise Duty, regulatory fees and levies, Withholding Tax, Import Duties on equipment and hardware, and PAYE for local employees, among others.

Taxation of Starlink and data sovereignty are two of the key issues that have come up in this debate.

UCC also operates a “balanced technology-neutral regulatory regime in practice”, to which entities like Starlink aren’t exempt. This approach ensures that all operators shoulder equivalent tax and compliance obligations while operating in the sector.

Another concern expressed over Starlink’s launch in Uganda was data sovereignty, to ensure that digital information is subject to the laws, regulations, and governance frameworks of the country or region where it is collected or physically stored. It ensures that a nation maintains legal control over data access, usage, and privacy, regardless of where the data owner is located.

UCC says that it has addressed this through explicit license conditions focused on localisation and oversight, affirming that these measures relating to data privacy are well within the licensing conditions signed. Starlink is also required to ensure the local registration of all devices activated within Uganda to enhance accountability and support regulatory enforceability in accordance with national laws.

“Overall, Starlink must comply with Uganda’s legal and regulatory framework governing security, data governance, consumer protection and content regulation,” says UCC. “These requirements help mitigate concerns associated with data being routed and managed entirely offshore, a challenge often linked to pure satellite service services.”

President Museveni, who oversaw the signing of the deal last week says, “Our interest is security, revenue assurance, and proper accountability within the telecommunications sector so that we know who is operating and who the customers are. I am pleased that Starlink has agreed to comply with Uganda’s laws and regulatory requirements as it prepares to begin service delivery in the country. I wish them good luck.”

Starlink provides high-speed internet by bouncing data between a huge satellites network in Low Earth Orbit and ground stations, creating continuous wireless connection.

Unlike traditional satellite internet that uses a few heavy satellites stationed thousands of miles away, Starlink uses thousands of mass-produced satellites orbiting at about 550 kilometers above Earth.

Because they are so much closer, the signal lag is significantly reduced, making activities like online gaming and video calls completely seamless.

At a home, for example, a small, motorized Starlink dish is installed, and instead of pointing at a single, fixed spot in the sky, the dish uses “phased-array” technology.

This allows it to electronically track fast-moving satellites overhead without requiring physical moving parts. As one satellite moves past the home’s field of view, the dish automatically switches to the next one.

While Starlink is yet to start commercial operations, Airtel Uganda has began testing “Direct-to-Cell” satellite service through its partnership with Starlink, according to Managing Director and C.E.O, Soumendra Sahu.

He calls this the beginning of the journey of exploring the long-awaited partnership with Starlink, marking the start of testing a highly advanced technology that enhances smartphone network connectivity through Direct-to-Cell satellite services.”

Airtel Africa is the first mobile network in Africa to begin testing the Starlink Direct-to-Cell service, whose other advantage is enhancing connectivity in underserved locations.

“This service will make it possible to extend connectivity to remote and hard-to-reach areas seamlessly. The technology automatically links smartphones to satellites, improving access to calls, text messaging, and selected data services”, said Sahu.

This internet technology can be accessed by any ordinary Standard LTE (long term evolution or 4G and newer) smartphones, with no hardware modifications whatsoever, for text messaging, voice calls, and eventually mobile data. No special equipment or new SIM card is required. He says that this solves the challenges of reaching areas like islands or national parks where ordinary internet that requires building and maintaining conventional towers is hard.

“Through Direct-to-Cell services, underserved communities across Uganda will enjoy seamless connectivity, enabling them to stay connected with loved ones and access opportunities for business and growth,” says Sahu.

Starlink has expanded rapidly across Africa, with official regulatory approval and commercial operations live in 25 African countries, starting with Nigeria in 2023.

Kenya and Rwanda were the first to adopt in in East Africa especially for primary high-speed trunk links to rural classrooms, healthcare clinics, and safari eco-lodges, followed by South Sudan, Burundi, Somalia, Chad, and the Democratic Republic of Congo (DRC).

In West Africa, Nigeria was followed by Ghana and Senegal, and later, Benin, Sierra Leone, Liberia, Niger, and Guinea-Bissau. In Southern Africa, Zambia and Mozambique extensively utilise it to support national digital health networks and remote learning, alongside Botswana, Malawi, Eswatini, Zimbabwe, Lesotho, and Madagascar.

Despite its widespread availability, Starlink remains blocked or locked in strict regulatory standoffs in major economic hubs, including South Africa, (ancestral home of owner Elon Musk), where authorities banned it over a failed 30 percent local ownership, also known as Black Economic Empowerment, agreement.

Namibia, The Gambia and Cameroon, have so far rejected it over concerns over digital state sovereignty and strict compliance concerns; and national security monitoring and local telecom revenue protection.