THE INTERNET IN AN AFRICAN LDC: CASE STUDY

January 2001 Michael Minges, Walter Brown and Tim Kelly wrote this report. Vanessa Gray and Mark Woodall provided editorial comments. The layout, formatting and production of the report was carried out by Nathalie Delmas. It is based on field research undertaken 21 – 25 February 2000 as well as reports and articles identified in the bibliography or as footnotes. We would like to thank Brian Reaves (CelTel), Graham Mathews (MSI) and Charles Tibenderana (UCC) for their valuable comments on the draft version of this report. We are par- ticularly indebted to Dr. Godfrey Kibuuka, Commissioner Communications, who greatly facilitated our research; to Charles Musisi of Uganda On Line, who shared his frank and insightful views with us; to Daniel Stern of Uganda Connect, who provided detailed comments; and to the others identified in the ‘Persons and Organizations met’ who took the time to answer our count- less questions. The views expressed are those of the authors and may not necessarily reflect the opinions of the International Telecommunication Un- ion or its members or the Government of the Republic of Uganda. This is one of a series of Internet diffusion case studies, which are being undertaken by the ITU. More details can be found on the web site at http://www.itu.int/ti/casestudies.

© ITU 2001

ii Contents

1. Country background ...... 1 1.1 Overview...... 1 1.2 Demography ...... 1 1.3 Economy ...... 1 1.4 Human development ...... 2 1.5 Political ...... 2

2. Information and communication technology status ...... 4 2.1 Telecommunication Sector ...... 4 2.2 Regulation and policy-making ...... 7 2.3 Network ...... 11 2.4 International service ...... 12 2.5 Information Technology Sector ...... 15 2.6 Mass media ...... 18

3. Internet strategy & policy ...... 21 3.1 Role of incumbent telecom operator in Internet ...... 21 3.2 Pricing structure for Internet services ...... 21 3.3 Regulatory status of Internet ...... 22 3.4 Universal access ...... 23

4. Sector absorption ...... 28 4.1 Government ...... 28 4.2 Health ...... 33 4.3 Education ...... 33 4.4 Business ...... 36

5. Conclusions ...... 41 5.1 State of the Internet in Uganda ...... 41 5.2 Strategies and recommendations ...... 43

Persons and organizations met ...... 47 Acronyms and Abbreviations ...... 48 Bibliography ...... 49 Telecommunication tariffs ...... 50

iii Figures

1.1 Map of Uganda ...... 1 2.1 Industry structure of the Ugandan Telecommunications Sector ... 5 2.2 Evolution of the Ugandan network ...... 7 2.3 UTL's billed and actual revenue, 1999 ...... 13 2.4 International traffic...... 13 2.5 Internet users in Uganda ...... 17 2.6 Mass Media Online ...... 19 3.1 Uganda's domain name ...... 24 3.2 Public payphone shelter ...... 25 4.1 Uganda Tourist Board Web site ...... 38 5.1 State of the Internet in Uganda ...... 41

Tables

1.1 Human Development Indicators ...... 2 2.1 Regional structure of telephone demand and UTL roll-out obligations ...... 9 2.2 UTL's tariff structure ...... 10 2.3 Telecom market indicators for Uganda...... 14 2.4 Personal computer market in Uganda ...... 16 2.5 ISPs in Uganda ...... 17 2.6 ISP international connectivity ...... 18 2.7 Broadcasting indicators ...... 20 3.1 Internet access prices in Africa ...... 22 3.2 Internet licenses ...... 23 3.3 Cybercafés in ...... 25 4.1 Uganda government web sites ...... 29 4.2 Destination Uganda ...... 39 5.1 Internet diffusion in Uganda ...... 42

Boxes

3.1 The Ugandan Telecentre experience ...... 26 4.1 Uganda Government Web Presence ...... 28 4.2 Digital Posts ...... 31 4.3 NADIC ...... 33 4.4 WorLD ...... 35 4.5 Training the trainers ...... 36

iv 1. Country Background

1. Country background

1.1 Overview other locations are classified as mu- Located in Eastern Africa, the Repub- nicipalities, none of which has more lic of Uganda is bordered by Sudan on than 100’000 population. Around the north, on the east, Tanza- 85 per cent of Ugandans reside in ru- nia on the south, on the ral areas. southwest and the Democratic Repub- lic of the Congo on the west. The capi- English was introduced during the co- tal is Kampala. Administratively, the lonial period. Although it is the official country is divided into four statistical language, it is not the first language regions and 45 districts. Districts are of the vast majority of the population. further divided into counties, sub- Indeed, it was estimated that only counties, parishes and groups of vil- around one million people spoke Eng- lages. Figure 1.1: Map of Uganda Although land-locked, Uganda is in the Great Lakes region of Africa with some 15 per cent of its surface area consisting of water. A significant portion of Lake Victoria—the larg- est fresh water lake in Af- rica and the source of the river Nile—is found in Uganda territory. Other large lakes include Lake Edward, Lake Albert, Lake Kyoga, and Lake George.

1.2 Demography

The last census was car- ried out in 1991 when the population of the country was estimated at 16.7 mil- lion. The latest estimate, Source: The World Factbook. for mid-year 1999, places the size of the population at 21.6 million. The popu- lish as a second language in 1977.1 lation growth rate during the 1990s Though that number has certainly was 2.6 per cent per year. Uganda has risen, Ugandans primarily speak one a young population with roughly half of the over 45 other dialects used in its inhabitants under the age of 14. the country. Over 15 per cent of the This is partly due to a life expectancy population speak Luganda, the most of only around 40 years. widely spoken second language after English.2 There are around 4.4 million house- holds in the country with the average 1.3 Economy household consisting of five people. The largest city is Kampala with Uganda’s 1998 Gross Domestic Prod- 890’000 inhabitants, around 4.1 per uct (GDP) was US$ six billion or cent of the population. About a dozen US$ 287 per capita, ranking it as one

1 Uganda Case Study

of the poorest countries in the world 1.4 Human development and officially classifying it as a Least Developed Country (LDC). Agriculture Uganda ranks 158 out of 174 coun- contributes over 40 per cent of GDP tries in the United Nations Develop- although its share has declined over ment Program (UNDP) Human ten per cent since 1990. Manufactur- Development Index (HDI) and is cat- ing and construction account for over egorized as being in the low human 15 per cent of the economy. Services development group. The HDI is a com- add around one third to the economy posite of key indicators of well being of which the communications sector including life expectancy, literacy, (posts and telecommunications) share school enrolment and per capita GDP. is 0.5 per cent. Uganda has been clas- Although Uganda rates favourably in sified by the World Bank as a Heavily- some indicators compared to other Indebted Poor Country, a process that African countries, its life expectancy started in April 1997, which means is one of the lowest in the world. Some that it is eligible for favourable con- human development indicators for sideration with regard to debt relief. Uganda are shown in Table 1.1. It In February 2000, the value of poten- should be noted that these are na- tial debt relief available to Uganda was tional averages and there are signifi- raised to US$ two billion.3 cant regional differences.

The country balance of payments has 1.5 Political been in deficit for some years, with the 1998 figure estimated at some Uganda was widely considered to have US$ 400 million. Imports are roughly among the most favourable develop- twice the value of exports. The bulk of ment prospects of any African nation Uganda’s exports are agricultural prod- following independence from the ucts. Its main export is coffee (55 per United Kingdom in 1962. This hope cent of total export value). Tea, tobacco was shattered by a coup in Janu- and fish are other traditional exports. ary 1971 led by Idi Amin. The coun- Electric current is also exported, attest- try was embroiled in civil unrest during ing to the country’s vast potential for Amin’s reign. Nationalist forces aided hydroelectric energy. The relatively low by toppled Amin and he fled contribution of energy to total exports the country in April 1979. Soon after, (2.2 per cent) is more a reflection of civil war broke out and finally ended inexpensive prices offered to neighbour- with the leader of the National Resist- ing countries rather than its true value. ance Army, , selected Ironically, Uganda’s second largest im- as President in 1986. Museveni was port is petroleum needed for its largest voted into office in May 1996 in the import, road vehicles. Cereals and medi- first presidential election since inde- cine are also major import products. pendence.

Table 1.1: Human Development Indicators

Uganda, 1997

Indicator Value Note

Life expectancy at birth 39.6 yearsNumber of years a newborn infant will live. Adult literacy rate 64% Percentage 15 and older that can read and write. School enrolment ratio 40% Measures percentage of school age population attending first, second and third-level educational establishments. GDP per capita (PPP$) 1'160 Measured in Purchasing Power Parity (PPP), which adjusts for the relative price levels.

Source: UNDP.

2 1. Country Background

In October 1995 a new constitution Uganda in terms of both Rwandan was adopted. That same year, the refugees as well as guerrillas enter- government restored the legal system ing Ugandan territory. In the north to one based on English common law. of the country, rebels forming part The National Assembly consists of of the “Lord’s resistance Army”, who 214 directly elected members and receive assistance from Sudan, 62 appointed ones. Representatives cause problems. Finally, Uganda is serve for five years. Although politi- one of five African countries with cal parties are allowed, they cannot troops in the Democratic Republic of sponsor candidates. In a June 2000 the Congo. This open-ended military referendum, Uganda voted to retain commitment is consuming resources the party-less system. from development projects within the country (for instance, the na- Uganda has recently faced political tional census has been postponed) tension with bordering countries. The and is making regional co-operation civil war from Rwanda has affected more difficult.4

1 See the Ethnologue web site at http://www.sil.org/ethnologue/countries/Ugan.html. 2 For more on the Baganda and Luganda see http://www.buganda.com/buganda.htm. 3 See World Bank Press Release at http://www.worldbank.org/hipc/country-cases/uganda/uganda.html. 4 The government spends 20 per cent of its budget on defence compared to 13 per cent on education, 3 per cent on health and less than two per cent on roads. See “Functional Analysis of Uganda Central Government Recurrent Expenditure” in Uganda Bureau of Statistics. Statistical Abstract. July 1999.

3 Uganda Case Study

2. Information and communication technology status

2.1 Telecommunication Sector one per cent). This one per cent levy, which is to be devoted to the Rural 2.1.1 Industry structure Communications Development Fund (RCDF), has never been collected but The Ministry of Works, Housing and the UCC plans to demand payment in Communications (MOWHC) (http:// the very near future. The UCC also has www.miniworks.go.ug) is the line min- significant real estate holdings that it istry with responsibility for postal and inherited from the break-up of UPTC, telecommunications matters, with the which presently finances an important exception of broadcasting, which falls share of its operations. under the Ministry of Information. The Ministry grants “major” telecommuni- Uganda Communications Tribunal cation licenses (i.e., facilities-based li- (UCT). The Communications Act calls cences) and appoints three members for the establishment of UCT. The Tri- of the Uganda Communications Com- bunal is to consist of three members mission (UCC). Three other Commis- appointed by the President and is to be sioners are nominated by the Uganda responsible for any disputes related to Institute of Professional Engineers, the communications services. It can issue Uganda Law Society and the Broadcast- decisions with the powers of a high ing Council. Once the six Commission- court. These decisions can be chal- ers have been appointed, they nominate lenged in the country’s Court of Appeal. the seventh Commissioner, who be- The members have not been appointed comes the Executive Director. as of February 2000, nor are there pres- ently any outstanding disputes that The Uganda Communications Com- would merit its intervention at this time. mission (UCC) (http://www.ucc.co .ug) is the national communications The sector itself comprises a Govern- regulator. It was created from the re- ment owned postal services provider, organization of the Uganda Posts and Uganda Posts Limited, a telecommuni- Telecommunication Corporation cations network provider undergoing (UPTC) as a result of the 1997 Uganda partial privatization, Communications Act. The Commission Limited (UTL), and several private net- consists of seven members (“Commis- work and service providers providing sioners”) including the Executive Di- fixed line and mobile telephony, and rector, in addition to support staff Internet services. The most significant (numbering around 20 in February of these is the Second Network Opera- 2000). The Commissioners were ap- tor (SNO), MTN-Uganda, which gained pointed in September 1998 and the its license via an open competitive ten- Executive Director was appointed in der in 1998. The structure of the sector December 1999. While radio and tele- is shown in Figure 2.1. vision broadcasting fall under the Min- istry of Information, technical aspects 2.1.2 Industry players such as frequency assignment, are the responsibility of UCC. The UCC also Until 1994, all telecommunication issues minor telecommunication li- services were provided by the Uganda censes for activities such as paging, Posts and Telecommunications Corpo- Internet service and private telecom- ration (UPTC), the wholly government munication services. The UCC is owned telecommunications service funded from spectrum fees, grants provider. Since then, the telecommu- from government and other approved nications sector has been progres- sources, and a share of revenues from sively liberalized. Two fixed line licensed operators (currently set at telephone network operators and three

4 2. Information and communication technology status

mobile telecommunication network op- provided only fixed line telecommuni- erators have been licensed. By the end cation services. Nevertheless, it is pre- of 1999, the following network provid- paring itself for competition in all other ers and operators were competing for services through a partnership with market share in Uganda: external strategic investors. Of par- ticular note is UTL’s interest in the Uganda Telecommunications Limi- Internet where a market study was ted (UTL). UTL is the successor of commissioned from ITU in autumn UPTC after the separation of postal 1999. UTL has developed a compre- from telecommunications functions. hensive business plan for the intro- UTL was incorporated in February duction of Internet networks and 1998 and is licensed to provide all tele- services throughout the country, and communication services—including has the mandate to use these serv- fixed line, mobile, and data/Internet. ices for the provision of packet However, up to the end of 1999, UTL switched voice and data services.

Figure 2.1: Industry structure of the Ugandan Telecommunications Sector

Government of Uganda Ministry of Works, Transport & Communications (MWTC)

Uganda Communications Commission (UCC)

Inter- Second Network Uganda Telecom Ltd connect Operator: (UTL) MTN-Uganda Ltd

Minor License Minor License Minor License holders holders holders

C O N S U M E R S

Note: Celtel is regarded as a “minor license holder”. Source: Government of Uganda, Privatization of Uganda Telecom, Information Memorandum.

5 Uganda Case Study

UTL’s recently established partnership work coverage expansion and Internet with Detecon of Germany and Telecel plans, Celtel has embarked on the roll International, an outcome of the pri- out of a national 16x2Mbit/s microwave vatization process (see section 2.2.2), backbone, along the same physical is expected to result in rapid expan- route as UTL and MTN. Celtel has plans sion and development of Internet and for international Internet connectivity mobile telephony services, in addition via a VSAT link-up to Intelsat and to to the traditional fixed line networks.5 connect remote rural customers via domestic VSAT networks. Unlike MTN Celtel Uganda (http://www.nic .ug/ or UTL, Celtel does not have an inter- CelTel). Celtel was the first private national voice license nor does it have telecommunication operator to be li- network roll-out obligations. censed in Uganda in October 1994 after the decision to liberalize the tel- MTN Uganda. MTN (http://www.mtn ecommunication sector. It launched .co.ug) was granted a so-called “Sec- the country’s first mobile cellular serv- ond National Operator’s” license in April ice in May 1995 using the GSM digital 1998. The license essentially covers any system. Celtel’s shareholders were: telecommunication service that MTN wants to provide including fixed, mo- · Mobile Systems International bile, long-distance and Internet. It paid (MSI)-Cellular (42%), an Am- US$ 5.8 million for the license and is sterdam-headquartered cellular obliged to install 89’000 lines within five investment company years (this apparently includes mobile (http://www.msi-cellular. com); cellular subscribers). MTN launched its wireless network in October 1998. Al- · Airtouch (37%), UK- though fixed wireless has been avail- based and one of the world’s larg- able since the latter quarter of 1999, est mobile cellular operators most customers have opted for the (http://www. vodafone-airtouch- mobile service, and most of them have plc.com); taken the pre-paid option. The tele- phone for fixed-cellular, provided by Sie- · International Finance Corporation mens, at around US$ 700 each, is much (IFC) (10.5%), the World Bank’s more expensive than the equivalent private sector development arm6 mobile handsets, which are often bun- (http://www.ifc.org); and dled with the price of a subscription, and for which there is already a vibrant · Commonwealth Development second-hand market. Consequently, the Corporation (CDC) (10.5%), the number of fixed-cellular subscribers by UK’s overseas development February 2000 was still under 200. By agency (http://www.cdc.co.uk). contrast, by the end of 1999, MTN al- ready had over 60’000 mobile cellular MSI has acquired Vodafone Airtouch’s subscribers, making it the largest and CDC’s shareholding and now has telecommuni-cation service provider in overall management control. Celtel’s the country. In just two years from its mobile network has grown to 22’000 us- introduction, MTN’s customer base has ers, 77 per cent of which are prepaid exceeded UTL’s fixed line capacity and (17’000). However, since the introduc- has overtaken Celtel, its mobile te- tion of competition in the mobile te- lephony competitor, by a wide margin. lephony sector, Celtel’s growth has been It has also succeeded in rolling out its limited. Subsequently, the company has network to all 46 main cities in the coun- developed new growth strategies and try, reaching parts of the country, which plans to increase its capacity and cov- are not currently served with fixed-line erage significantly. This growth strat- access. egy includes entering the Internet market, and various new service offer- Although MTN focused its early roll out ings such as free voice mail.7 Celtel’s strategy on the lucrative mobile te- lead foreign partner, MSI, has an- lephony market, it is now giving in- nounced a strategy for Africa-wide creased attention to the business Internet development. To meet its net- market. MTN’s solution is to use point-

6 2. Information and communication technology status

Figure 2.2: Evolution of the Ugandan network

By communication service, and by comparison with East African neighbours, 1995-99

7HOHSKRQHÃ 150 0.8 1.2 VXEVFULEHUVÃ

Source: ITU World Telecommunication Indicators Database.

to-point microwave radio to provide munications Act, approved by Parlia- an ISDN primary rate wireless inter- ment in August 1997: face to buildings and businesses within line of site of its transmitters in the · Restructuring Uganda Posts and Kampala area. These customers can Telecommunications Corporation then provide local wiring for end us- (UPTC). Uganda Telecom was ers who include Internet and fax us- split off from UPTC and incorpo- ers as well as telephone users. Initial rated in February 1998. customers include computer distribu- tors, hotels and trading companies. · Creation of an independent tel- MTN Uganda’s ownership structure is ecommunication regulator. The the following: Uganda Communications Com- mission (UCC) was established in · Mobile Telephone Networks 1997 as a result of the Communi- (MTN) (50%). The South African cations Act. Its executive direc- mobile operator also has cellular tor is Patrick Masambu, formerly investments in Cameroon, with UTL. Rwanda and Swaziland; · Introduction of competition. A · Telia (30%), Sweden’s incumbent private company, Celtel, obtained telecommunication operator; a license for mobile cellular in 1994. A full-fledged Second Na- · Invesco (10%), a Ugandan com- tional Operator (SNO) license pany; and was awarded to MTN Uganda in 1998. The SNO license allows any · Tristar (10%), a Rwandan com- telecommunication service to be pany. provided. All non-basic telecom services are open to competition. 2.2 Regulation and policy- According to the Uganda Com- making munications Act, UTL and the second network operator are to 2.2.1 Market liberalization be awarded a period of protec- The government has embarked on a tion from further full-service four-part strategy of liberalization in competition (in particular, for in- the telecom sector. Much of this strat- ternational service) for a period egy is outlined in the Uganda Com- of five years. This five year ex-

7 Uganda Case Study

clusivity period began in cently been paid for mobile licences in June 2000 and will run until countries close to Uganda, it is likely 2005. that the price of the mobile license alone would have been close to the · Privatization of incumbent opera- entire price paid for UTL. In other tor. See below. words, the price paid for UTL’s fixed line network and assets is very low and 2.2.2 Privatization might even be negative. The delay in The privatization process in Uganda’s concluding the sale has allowed MTN telecom sector commenced in Octo- to become the largest operator in the ber 1994 with the licensing of Celtel, country and has arguably delayed UTL’s a private company, to provide mobile own plans to enter the mobile and ISP cellular service. This was followed by markets. It would appear to be the case the issuance of the SNO license to MTN that this has resulted in a much lower Uganda in 1998. The sale to a strate- price for UTL than could have been ob- gic investor of a majority of shares in tained a year or so ago. the incumbent fixed-line operator, UTL was intended to be an early part of Nevertheless, it should be taken into the process. However, this was de- account that, in acquiring UTL, the con- layed for various legal and operational sortium has also taken on considerable reasons. Initial talks with Telekom debts and pension liabilities (including Malaysia broke down following the staff of the former UPTC). UTL’s debts, Asian financial crisis while a later at- as of 31 March 1999 amounted to some tempt to involve WorldTel proved abor- Ushs 47.0 billion (US$ 31.4 million). tive. Consequently, Uganda was, until This includes interest payable on loans recently, in the unusual position of hav- from, inter alia: ing introduced competition, including international services, before it had pri- · the World Bank (via IDA) for vatized the incumbent operator. loans granted in 1987 and 1990;

After two false starts, an agreement to · the French government; sell was finally announced in February 2000, following a competitive bidding · the African Development Bank; process. The process was concluded in June 2000. Some 51 per cent of UTL · the government of the Republic were sold to the international UCOM of Korea. consortium for US$ 33.5 million.8 Telecel International, the Pan-African UTL’s cash flow in the 13 months to mobile cellular operator, heads UCOM 31 March 1999 was Ushs 15.9 billion with 80 per cent, with the remaining (US$ 10.6 million), which was more 20 per cent held by Detecon (http:// or less equivalent to the annual inter- www.detecon.de/index_en.html), the est payable on loans, leaving UTL in a international consulting subsidiary of poor position to meet its other liabili- Germany’s incumbent telecom opera- ties and to invest in network roll-out. tor, Deutsche Telekom (http:// www.telekom.de/english/index.htm). 2.2.3 Universal service and quality of service obliga- The sale price values UTL at tions US$ 65.7 million, or just over In acquiring the majority shareholding US$ 1’000 per subscriber line. Given in UTL, the Detecon-led consortium that the revenue per subscriber in 1999 has also taken on a number of obliga- was some US$ 870, this sum repre- tions with regard to future network sents just over one year’s revenue. roll-out during the period of duopoly. However, it is perhaps more relevant In particular, the operator must roll- to consider what would have been the out some 100’000 new lines within the price if the consortium had been bid- five year period of which 30’000 sub- ding only for the mobile license (with scriber lines and 3’000 payphones international gateway) that UTL holds. must be within specified regions (see Judging by the prices, which have re- Table 2.1). The remaining 67’000 lines

8 2. Information and communication technology status

can be distributed according to de- · Major licenses. These are issued mand. directly by the Ministry, on the advice of the UCC. They cover the In addition, UTL will take on quality of main facilities-based carriers in the service obligations for nine specified fields of fixed and mobile telecom- indicators. Those indicators relevant munication services, long-distance to Internet service provision include and leased lines capacity resale, the following targets: satellite services and third party private network services. · to increase local call completion rate to over 85 per cent within · Minor licenses. These are five years (the existing level is granted directly by the UCC and 35 per cent); mainly cover non-facilities based services (such as messaging, · to fix 85 per cent of faults within value-added services, private 24 hours and 90 per cent within telecommunications services, 72 hours; equipment sale and leasing) as well as facilities-based networks · to achieve 95 per cent network for paging, telex, telegraph etc. digitization; and Although it is not specifically stated in the Act, Internet Serv- · to ensure a maximum connection ice Provision comes under the time of ten days of request within category of minor licenses and urban areas. some eight ISP licenses had been awarded as of February 2000 of 2.2.4 Licensing which four were already active. One of the major changes introduced by the 1997 Communications Act is Licensees are to contribute one per the licensing regime for telecommu- cent of their annual revenues to the nication operators and service provid- UCC. It is intended that these fees ers, which is administered by the UCC. should eventually be used as the ba- One of the principal functions of the sis for the Rural Communications De- UCC is to monitor, inspect, license and velopment Fund (RCDF). The UCC also regulate telecommunications in the manages licenses for radio frequency country. The licensing regime recog- use. The market for private radio sta- nizes two broad types of license: tions is particularly active.

Table 2.1: Regional structure of telephone demand and UTL roll-out obligations

Existing distribution at 31/3/99 and regional roll-out obligations to 2005

Region Subscriber Public Teledensity, Roll-out Roll-out lines, payphones, at 31/3/99 obligation, obligation, subscriber lines payphones

Kampala 36’472 565 1.86% 10’000 1’000 Central 3’920 162 0.1% 5’000 500 Eastern 4’560 106 0.09% 6’000 600 Northern 824 7 0.02% 3’000 300 Western 6’053 194 0.11% 6’000 600 National total 51’829 1’034 0.26% 30’000 * 3’000

Note: * These figures do not include a further 67’000 lines to be installed by 2005 according to the distribution of demand. Source: Government of Uganda, Privatization of Uganda Telecom, Information Memorandum.

9 Uganda Case Study

2.2.5 Tariff rebalancing · A national dialing code for local Uganda is in a relatively unusual po- rate access to the Internet. Some sition relative to other African coun- 15 different African countries tries in that the process of tariff currently have national dialing rebalancing began early. Now, UTL’s codes9 . The lack of one in Uganda tariffs for international calls are among means that the price of access the lowest in Africa and its settlement for long-distance dial-up is rate with the United States (US$ 0.25 US$ 8 per hour; per minute at May 2000) is the low- est. However, UTL’s local call tariffs are · A “premium rate” access number among the highest in Africa. The ratio for Internet whereby the costs of between local and long distance calls Internet access are bundled into is 1:2.5 (1:10 or more is common in the cost of a local call. In Egypt, Africa). Table 2.2 summarizes the where this service was intro- main rates in force. duced in December 1999, it is already realizing more than a mil- While the moves towards tariff lion dollars per month in rev- rebalancing are to be applauded, the enues, shared between the unintended side effect is that dial-up participating ISPs and Telecom Internet usage is not as high as it would Egypt. ISPs in Uganda have re- be if the local call charge was lower. quested such a facility but UTL However, the main problem here is not has not yet delivered it. so much the high initial charge (Five US cents per minute), but rather 2.2.6 Interconnection that there are no internet-friendly tar- Since the number of mobilephones in iffs that might allow, for instance: Uganda overtook the number of fixed- lines, in the second half of 1999, the · Untimed local call access after a issue of mobile/fixed interconnection certain length of time (e.g., af- has become more significant. How- ter 15 minutes). Instead, the ever, the stakes have shifted consid- price of using the Internet for erably. While UTL was still the local call-dial-up is US$ 3 per dominant operator, it could afford to hour (peak time); charge relatively high prices for calls

Table 2.2: UTL's tariff structure

February 2000, in Ugandan Shillings and US cents per minute

Tariff In Ugandan Shillings In US$

Fixed charges (business & residential) · Connection fee 170’000 113.33 · Subscription 10’000 per month 6.67

Local calls: · Peak rate 75 per minute 0.05 · Economy (8pm – 6 am) 45 per minute 0.03 · Super-economy 25 per minute 0.017 (2 pm sat – 8am Mon)

National long-distance rate 200 per minute 0.13

International calls: · East Africa 1’500 per minute 1.00 · Other int’l 1’800, 2’000 or 1.20, 1.33 or 1.53 2’300 per minute

Source: UTL.

10 2. Information and communication technology status

terminated on its network. Now that SMS messages to mobile subscribers. it is not the dominant operator, a sig- However, it is expected that these will nificant and rising proportion of UTL- come as mobile Internet applications billed calls now go to Celtel or MTN enter the market. mobile subscribers. Thus, whereas UTL originally had a motivation to seek The regulatory framework for inter- high interconnect rates, it is now seek- connection is based on contracts be- ing much lower ones. tween operators, which should be based on principles of neutrality, non- In the eight months to May 1999, discrimination and equality of access. UTL’s outgoing traffic to MTN was All interconnect agreements are sub- 9.2 million minutes and its incoming ject to review and approval by the traffic was 4.5 million minutes. How- regulatory, the UCC, after a five-year ever, for much of that period, MTN had period. All interconnect disputes fewer than 20’000 subscribers. It is should be arbitrated by a Commission likely that the interconnect flows af- established by the UCC. ter May 1999 were much higher, with an increasing share of total traffic be- 2.3 Network ing between MTN subscribers. 2.3.1 Backbone network The original interconnect arrangement A Master Plan for the Ugandan net- was negotiated between Celtel and work was developed in 1993 under a UTL and foresaw interconnect rates at contract funded by NTT, Japan. This 500 Ush per minute for termination was updated in the form of a demand of calls on Celtel’s network (mobile) forecast, carried out in 1997 by a con- and 300 Ush per minute for terminat- sultant and funded by the ITU. This is ing on UTL’s network (fixed). These still used, though it has been over- high rates are one reason why Celtel’s taken by events, in particular the rapid original attempts to popularize mobile expansion of mobile communications. in Uganda were not successful. UTL’s switching network comprises MTN’s entry into the market changed 17 digital, 26 analogue and 62 the situation radically. It offered UTL manual exchanges. In general, Kam- a termination rate for calls on the pala is well served with modern, dig- mobile network of just 350 Ush per ital equipment, but the rest of the minute and agreed to pay UTL 150 Ush country is not so fortunate and parts for calls terminating on the fixed net- of the network are obsolete. Mod- work. With these low prices in place, ernization of the network has de- it was able to offer considerably re- pended on grants and loans from duced prices to consumers. MTN’s ini- foreign partners, including from the tial efforts to negotiate a low rate of Korean and Belgian governments. interconnect with Celtel for mobile to For instance, the Belgian government mobile calls was rejected and a rate is funding a US$ 4.5 million project of Ush 210 per minute was estab- to establish a 3’000 line exchange in lished. However, this was subse- Gulu and an SDH microwave link quently reduced and Celtel is now between Gulu and Kampala. How- negotiating a lower interconnect rate ever, one problem with such donor- with UTL, too, as part of its efforts to funded projects is that they are relaunch its service. As from frequently awarded at above-market 1 March 2000, Celtel’s new intercon- prices and the beneficiary is often nect rates are 160 Ush per minute for locked into expensive maintenance calls to and from the fixed network. contracts once the initial installation is implemented. For the moment, there are no specific interconnect rates for mobile access Around 90 per cent of subscribers are to Internet-based services, for in- connected to automatic exchanges. stance to develop WAP (Wireless Ap- Some fibre is deployed in the back- plication Protocols) services or to bone network, specifically between encourage use of the Internet to send Kampala and Entebbe but the major-

11 Uganda Case Study

ity of the backbone network is pro- tween availability of capacity and vided by microwave links. Interna- location of demand. Thus, while the tional connectivity is provided available line capacity at the end of principally by a satellite earth station 1999 was just over 85’000 lines, at Mpoma, near Kampala. fewer than 60’000 lines, or 70 per cent of capacity, had actually been UTL is involved in an East-African installed. The available unused ca- project for co-operation on the crea- pacity is more than twice the size of tion of a digital transmission network. the waiting list. Capacity utilization The project was signed on is highest in Kampala (>80%) and 29 April 1997 and tender notices were lowest in Central, Eastern and North- issued in July 1999. UTL’s contribu- ern regions (around 40%). A second tion to the US$ 57 million project is problem plaguing UTL has been un- some US$ 13 million. The project may paid bills and difficulties over debt have a higher chance of success if recovery, including from government Detecon succeeds in the Tanzania departments. The pre-paid systems Telecom privatization process. used by the cellular operators largely avoid this problem. MTN’s backbone network, which is also based principally around SDH micro- 2.4 International service wave links, has the advantage of be- ing much more modern and 2.4.1 International traffic homogeneous than UTL’s network and Like many other developing coun- is also more easily upgradeable, given tries, Uganda is heavily dependent its modular design and MTN’s easier upon revenues from international access to financial resources. It is also telecommunications. However, the being extended more rapidly into sec- level of dependency is relatively low ondary cities and rural areas of compared with that of other coun- Uganda. There are provisions for shar- tries reviewed in the ITU/CTO/ ing of resources (e.g., high sites) but InfoDev country case studies series apparently little enthusiasm to do so (see http://www.itu.int/wtpf/cases/ on the part of either UTL or MTN. Also, Uganda/index.htm). Indeed, the MTN recently launched an optical fi- overall level of revenue from inter- bre network. national markets was just over ten per cent of UTL’s total revenue 2.3.2 Rural access (Figure 2.3). Rural access is limited both by a lack of investment and by the fact that There are a number of reasons why parts of the network were destroyed UTL gains so little from international during the civil unrest of the 1970s services: and 1980s. While the network in the area around Entebbe and Kampala has · UTL’s overall inefficiency in col- benefited from World Bank funded in- lecting and retaining revenues. vestment, the rural network has gen- For instance, out of the erally been left to deteriorate. The one US$ 75 million that was billed by exception to this is the Gulu project UTL in the last financial accounts, noted above. World Bank and Nordic some 40 per cent were lost as a Development Funds are available for provision for bad debt and a fur- a second phase of this project. How- ther 34 per cent were lost due to ever, it is likely that wireless commu- “audit adjustments”. nication, both fixed and mobile, may provide a more viable prospect than · Billing inefficiencies mean that copper-based solutions for rural areas. much traffic goes unrecorded. For It would also be advisable to allow instance, UTL reports only other network operators than just UTL 4.4 million minutes of traffic to bid to use the donor funds. coming from the US during 1998 whereas the FCC reports a total One major problem which UTL has of 10.6 million minutes from US suffered from is the mismatch be- carriers.

12 2. Information and communication technology status

Figure 2.3: UTL's billed and actual revenue, 1999

For 13 months, ending 31 March 1999

Other, 4.9% Leased lines, 6.3% $FWXDOÃ Telex, 4.6% FDVKÃ 3URYLVLRQÃ IORZÃÈ IRUÃEDGÃ ,QWHUQDW GHEWVÃÈ LRQDOÃÈ 'RPHVWLFÃ 3671Ã $XGLWÃ VHUYLFHVÃ DGMXVWPHQWVÃ È È

7RWDOÃ8VKÃÃELOOLRQ 7RWDOÃ8VKÃÃELOOLRQ Ã 86ÇÃPLOOLRQ ÃDIWHUÃDXGLWÃDGMXVWPHQWVÃ Ã 86ÇÃPLOOLRQ

Source: UTL audit report and financial statements.

· UTL is a net payer to many de- · There is strong evidence for refile veloped countries, including UK, of traffic via third countries. For Germany and Sweden. This liabil- instance, incoming traffic from ity is mainly due to transit Canada, a major refile hub, rose charges where UTL is paying well by 315 per cent in 1998 while above market rates, perhaps due traffic from the UK fell by 175 per to commercial naivety or perhaps cent. The fact that Uganda has due to the fact that it is locked traditionally been part of a into multi-year contracts. sender-keeps-all agreement with

Figure 2.4: International traffic

Uganda's international traffic, 1990-98, and major traffic partners, 1998

8JDQGD VÃLQW OÃWUDIILF, in minutes (thousands) Other 25’000 India 8JDQGD V ÃP DMRU Ã Germany 20’000 LQWHUQDWLRQDOÃWUDIILFÃ Incoming, to Uganda Japan SDUWQHUV in thousands of minutes, 1998 15’000 Sw itzerland Italy Out, from Uganda 10’000 Outgoing, to Uganda In, to Uganda Canada 5’000 UK US 0 1990 1992 1993 1994 1995 1996 1997 1998 0 2’000 4’000 6’000 8’000 10’000

Note: Excludes traffic with neighbouring East African countries which is outside the accounting rate system. Source: ITU/TeleGeography Inc "Direction of Traffic Database".

13 Uganda Case Study

Table 2.3: Telecom market indicators for Uganda Years ending 30 June

Unit 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

TELEPHONE NETWORK Main telephone lines 27’886 28’405 30’047 20’770 30’449 38’972 47’927 54’074 56’919 57’091 - Per 100 inhabitants 0.17 0.17 0.17 0.12 0.16 0.20 0.24 0.27 0.28 0.27 % digital main lines 1/ ... 59.7 42.2 60.6 68.0 64.2 75.2 75.6 90.6 90.9 Public payphones 1/ 2/ ...... 314 354 378 693 799 1’158 1’333 1’380 Waiting list 1/ 3/ 15’675 20’373 6’233 2’568 2’430 4’554 6’277 8’092 8’954 9’161 MOBILE SERVICES Cellular mobile subscribers — — — — — 1’747 4’000 5’000 30’000 56’358 - Per 100 inhabitants — — — — — 0.01 0.02 0.02 0.15 0.27 TRAFFIC (Millions of minutes) Total national ...... 215.7 239.3 263.8 ... - Local ...... 168.0 187.6 195.7 ... - National long distance ...... 47.7 51.7 68.1 ... International bothway 4/ 6.8 7.1 8.5 9.6 13.9 17.2 19.5 20.7 24.3 25.2 -International outgoing 4/ 3.9 3.8 3.5 2.7 3.5 4.9 5.8 6.3 6.4 6.3 - International incoming 4/ 2.8 3.3 5.0 6.9 10.4 12.3 13.7 14.4 17.9 18.9 STAFF Full-time telecom staff 5/ 2’215 1’221 1’247 1’246 1’219 1’324 1’348 1’399 1’400 1’672 QUALITY OF SERVICE Faults per 100 main lines per year ...... 380.0 100.0 120.0 110.0 80.0 80.0 ... TELPHONE TARIFFS (National currency, including taxes) Connection ...... 21’250 21’250 125’000 138’000 138’000 170’000 170’000 170’000 Monthly fee ...... 800 800 1’500 6’000 6’000 19’000 10’000 10’000 3 minute local call (peak rate) ...... 50 50 50 200 200 ... 225 225 REVENUE (National currency, billions of Uganda shillings) Total telecom services revenue 6/12.4 21.5 33.4 32.8 40.7 47.8 45. 4 61.7 74.4 126.7 - Telephone service revenue 11.1 20.4 31.5 31.5 37.2 37.2 43.9 25.8 28.5 CAPITAL EXPENDITURE (National currency, billions of Uganda shillings) Annual telecom investment 7/ 3.0 11.6 14.2 11.8 9.2 22.4 30.4 26.6 22.3 80.3

Source: Uganda Telecommunications Ltd. (UTL). Note: 1/ 1999 at August. 2/ UTL only. 3/ Excluding suppressed demand. 4/ Not including traffic with Kenya or Tanzania. UTL only. 5/ 1990 including postal staff. 1991-1997 telecom only staff of former Uganda Posts & Telecom Corporation. 1998 estimate of UTL staff. 1999 staff of UTL (1’430), CelTel (107) and MTN (125). 6/ 1997-1999 includes UTL annualized revenue. 1998-99 includes estimates from mobile cellular services. 7/ Including estimated investment in mobile cellular for 1998-99.

neighbouring East African coun- per minute since 1998, which is tries makes it particularly vulner- close to the FCC’s benchmark able to sudden shifts in traffic. rate of 23 US cents per minute for low income countries. By con- · UTL’s net settlement from the trast, Kenya’s settlement rate is United States in calendar 55 US cents per minute. year 1998 amounted to only US$ 2.3 million after accounting The lack of revenue gained from in- for transit fees. By comparison, ternational services is one reason why Kenya gained over US$ 13 mil- UTL has been unable to expand its lion. Uganda’s settlement rate network at a faster rate. Funds for with the US has been 25 US cents investment have been falling (in 1999,

14 2. Information and communication technology status

for instance, only US$ 1.6 million was 2.5 Information Technology invested by UTL, which is only one Sector tenth as much as in previous years). A further reason for the poor invest- This section identifies organizations in- ment record is the uncertainty sur- volved in the Information Technology rounding the stop-go privatization (IT) sector, summarizes the computer process. hardware market, and examines Internet service provision. No single 2.4.2 IP Telephony government ministry or agency appears to have been designated the lead ISPs are not allowed to provide Voice agency for IT in the country. Several over Internet Protocol (VoIP) services. are involved in IT-related areas with VoIP is not illegal per se but ISPs are very little coordination. Government not allowed to provide voice services, ministries with a role in IT include the which remain the exclusive monopoly MWTC and MOI (yet ironically neither of the two full-service operators, UTL even has a web site!). The former pro- and MTN. The restriction against VoIP vides oversight for the telecommunica- is outlined in the ISP license. Other tion and postal sectors, while the latter voice-related services such as Fax Mail performs the same duty for the mass are, however, allowed. media and broadcasting sectors. The Uganda Investment Authority UTL’s lack of dependency on revenue (http://www. ugandainvest .com), the from international services puts it in Uganda National Council for Science and a relatively stronger position than Technology (http://www.uncst. go.ug), other African PTOs with regard to the and the Institute of Computer Science possible threats from IP Telephony. at University (http://www. The main opportunity for IP Telephony muk.ac.ug/faculty/compsc~1/ in countries such as Uganda is for ter- index.html) are also involved in IT.10 mination of incoming calls. The gap between the official settlement rate (25 US cents per minute) and the un- IT user-based organizations in the coun- official rate offered on telecom min- try include the Uganda Computer Soci- utes exchanges (19 US cents per ety, which arranges the annual AITEC minute is offered at www.arbinet.com) computer show each April. Another IT- is relatively small compared with related organization is the local chap- Uganda’s neighbours (in Kenya, the ter of the Internet Society (Uganda gap is between 55 US cents official ISOC) (http://www.isoc.or. ug). and 34 US cents unofficial). Thus the scope for price arbitrage is limited. 2.5.1 Computer market There are limited data on the Ugan- On the other hand, because Uganda dan computer market. There are sta- is more open than its neighbours to tistics available for the yearly value of incoming Internet traffic (the VSAT imports of office machines and auto- data market is liberalized, for in- matic data processing machines (see stance) there is more scope for bring- Table 2.4). There is no breakdown by ing IP voice traffic in. The official units or disaggregation of personal situation is that only two operators, computers (PCs). There is no domes- UTL and MTN, are licensed to use IP tic production of computers and lim- Telephony though neither claims they ited assembly and import duties have are actually doing so (indeed, they been reduced to zero. There are appeared unaware when interviewed roughly a dozen shops selling per- that they were able to provide IP Te- sonal computers and other office lephony). No ISPs admit to using IP equipment in Kampala. According to Telephony, though they are ru- one vendor, there were around moured to be franchisees for 30’000 PCs sold in the country in Net2Phone, a subsidiary of AT&T, 1999. It is widely believed that sales who are active in the country. The of PCs have increased sharply over UCC has not taken an aggressive the last few years as a result of stance against IP Telephony, unlike preparation for the Year 2000 prob- regulators in other African countries. lem and increased Internet activity.

15 Uganda Case Study

Table 2.4: Personal computer market in Uganda

1994 1995 1996 1997 1998 1999

Office machines & ADP imports ($m) 19.5 13.8 11.5 11.2 18.4 n.a. Estimated PC sales (units) 9’000 7’000 7’000 8’000 15’000 30’000 Estimated stock of PCs 15’000 24’000 31’000 38’000 45’000 60’000 PCs per 100 inhabitants 0.08 0.12 0.16 0.19 0.22 0.28

Source: ITU estimates. Data on office machines and automatic data-processing machine imports are from the Uganda Bureau of Statistics.

We “guesstimate” that there were Internet Cafés, providing “drop in” around 60’000 PCs in the country at Internet and e-mail services mainly to the end of 1999, based on rough deri- foreign tourists, international staff on vations of import data and 1999 unit short term assignment to Uganda and sales estimates. This results in a PC local students. These Internet Cafés penetration of 0.28 per 100 people, provide a useful public service and a placing Uganda roughly between valuable contribution to the growing neighbours Tanzania (0.19) and Kenya awareness of the power and useful- (0.43). Almost ten per cent of Ugan- ness of ICT. One factor that limits dan PCs are connected to the Internet. Internet and e-mail usage in Uganda is the limited availability and 2.5.2 The Internet market affordability of computers; nonethe- less, it is anticipated that Internet The history of the Internet in Uganda services will experience very high dates back to April 1993 with refer- growth in the near future. ences to a Fidonet node at . Limited commercial e-mail The number of Internet subscribers services became available in Au- was around 4’100 at the end of 1999. gust 1994 and the first host using the There have been no surveys regard- .ug (Uganda) domain name was de- ing the number of Internet users by tected in July 1995. By October 1995, either the national statistical agency several organizations were offering or market research firms. Existing Internet connectivity. For example, the estimates vary tremendously. A MUKLA (Makerere University Kampala) March 1999 report pegged the number Internet Service was providing e-mail of Internet users at 15’000.12 A news for students and faculty. In addition, article cites a study by the United StarLight Communications and Nations Industrial Development Or- Infomail were providing Internet ac- ganization (UNIDO) claiming there cess, while Transmail and InfomaNet were 10’000 users in Kampala in Au- were providing e-mail services. gust 1999 and that this figure had risen to 40’000 by November 1999.13 The 1997 Uganda Communications Act A more probable figure, based on vari- introduced a licensing regime for ous interviews and estimates of the Internet services. As of Febru- number of users per subscription, sug- ary 2000, UCC had issued eight gests that there were around “Internet Access Service” licenses. 25’000 Internet users in Uganda at the However, only two can be considered beginning of 2000. This estimate in- to be providing significant public cludes regular and casual e-mail-only Internet and email services (see Ta- users. Growth during 1999 appears to ble 2.5).11 Two small ISPs concentrate have been high. One cyber-café, which on niche markets, while most licensed opened in March 1999, claims to have ISPs have yet to begin operations. doubled the number of PCs in the es- There are a growing number of tablishment in less than a year.

16 2. Information and communication technology status

Table 2.5: ISPs in Uganda

Licensed ISPs, February 2000

Name Subscribers Web site (12/99)

1 Infocom a, c 2’650 imul.com 2 Swift Global a, d 1’360 www.swiftuganda.com 3 Wilken Afsat a 57 www.afsat.com 4 Bushnet 25 www.bushnet.net 5 Spacenet a, b - www.spacenetuganda.com 6 Computers & Multimedia a, b - www.ugandaweb.com/cms 7 Africa Online a, b - www.africaonline.co.ug 8 Sanyutel b -

4’092

Note: a) Has license for international data gateway. b) Not operational at December 1999. c) Formed from merger of Infomail and Starcom and purchased by MSI in October 2000. d) Purchased by Africa online in March 2000. Source: ITU adapted from UCC and ISP data.

The most significant development so Kenya, Swaziland, Tanzania and Zim- far for Uganda’s Internet market is the babwe), received an Internet access entry by the country’s existing tele- service and international data gate- communication operators as well as way license in January 2000. In foreign firms. An Internet business March 2000, it announced that it had plan has been prepared for UTL but it purchased Uganda’s second largest is unlikely it will be acted on until its ISP, Swift Global.14 Meanwhile, MSI, new strategic investors assume opera- the parent of CelTel, purchased Ugan- tional control of the company. The plan da’s largest ISP, Infocom, in October proposes that UTL become a retail ISP. 2000.15

Africa Online, the regional Internet MTN Uganda appears to be taking a service provider with operations in six different course with plans to use wire- countries (Côte d’Ivoire, Ghana, less technology for providing Internet

Figure 2.5. Internet users in Uganda

Estimated number of Internet users, 1995-1999 and classification of Internet users, March 1999

(VWLPDWHGÃQXPEHUÃRIÃ,QWHUQHWÃXVHUVÃ8JDQGD 'LVWULEXWLRQÃRIÃ,QWHUQHWÃXVHUVÃ8JDQGDÃ0DU 25’000 Govern- Int’l orgs ment (UN, WB, 20’000 5% etc.) 5% 15’000 NGO / Academic 10’000 non-profit 25% Business 5’000 25% 40% 0 1995 1996 1997 1998 1999

Source: Left chart: ITU estimates. Right chart: Charles Musisi.

17 Uganda Case Study

Table 2.6: ISP international connectivity

February 2000

ISP Bandwidth Note

Infocom 256 kbps up / 512 kbps down Two VSATs: 1st to Norway (taide.net, affiliated with 128 kbps full circuit Telnor), 2nd to NSN (Washington State, USA). Paying ~US$ 17’000 / month

Afsat 64 kbps up / 256 kbps down Plans to upgrade to 128Kb full circuit (February 2000). Downlink: kersur.net

SwiftUganda 256 kbps full circuit VSAT via Intelsat / France Telecom

SanyuTel 64 kbps full circuit

BushNet 64 kbps full circuit Using MTN

MTN 512 kbps full circuit Via TeleGlobe (on Intelsat).

AfricaOnline 128 kbps up / 256 kbps down Leased from MTN

Source: ITU adapted from ISP interviews and Charles Musisi.

access to its existing subscribers. coming Internet traffic is greater than Mobile phones are already being con- outgoing—reflecting the fact that most nected to PCs and used to dial-in to Ugandan surfers access content ISPs. However, the speed is presently abroad—international connections are limited to 9.6 kbps. In order to get asymmetric. National peering is non- around this limitation, MTN is explor- existent. ing a number of options. One in- volves installing special software on 2.6 Mass media its network that would strip out the graphics that overwhelm the low 2.6.1 Print connection speed. Another possibil- According to UNESCO statistics, there ity is the introduction of Wireless were two daily newspapers in 1996 Application Protocol (WAP) that tai- with a circulation of 40’000 readers. lors Internet access for mobile This implies that only two out of phones. A third option is the intro- 1’000 people read a newspaper in duction of General Packet Radio Uganda, far lower than radio or tele- Services (GPRS) that uses packet- vision penetration. These statistics switching technology to achieve seem strange, considering that over higher transmission speeds. half the adult population is considered literate. Affordability may be a factor, Uganda’s international Internet band- with English-language dailies costing width has been doubling over the last USh 600. few years. It was 1.2 Mb up and 1.7 Mb down at February 2000 (see Table The two leading daily English language 2.6) compared to 640kb up/768 down newspapers available in Kampala are in March 1999 and 384kb in April The Monitor and The . They 1998. ISPs are allowed to have their both have web sites, http:// own international connectivity pro- www.africanews.com/monitor and vided they have obtained the proper http://www.newvision.co.ug respec- license. All major ISPs have their own tively. The current days edition for international connectivity via VSAT. both newspapers is published on the The other ISPs lease capacity from web site for free; archives and sub- them or telecom operators. Since in- scriptions are also available. The New

18 2. Information and communication technology status

Vision also has links to sister daily and pala, some of which have their own weekly editions including one pub- web sites.16 The Internet is serving lished in the Luanda language. Ugandan’s love of music with audio streaming available on some of the 2.6.2 Broadcasting FM radio web sites and downloading music clips a common application in 2.6.2.1Radio Kampala’s cyber cafés.

Radio is by far the most popular 2.6.2.2Television source of information and entertain- ment with a reported 2.6 million ra- There are nine TV stations across the dio sets in the country. Radio is cheap country with coverage available in (receivers are relatively inexpensive larger towns. Stations include govern- compared to televisions, telephones ment run Uganda TV, Sanyu TV, a re- or computers and service does not ligious station (Lighthouse Television, require a subscription); accessible LTV) and WBS. There are an estimated (there is near nation-wide coverage 200’000 television households. and neighbouring country broadcasts can also be picked up); and easy Subscription television is available in (state-owned Radio Uganda broad- Kampala through MultiChoice Africa, casts in English as well as 28 other a subsidiary of the South African MIH local languages and radio listening Group. There is both an analogue and does not require literacy or other digital service with 1’843 subscribers skills). There are ten AM stations and to the former and 2’110 to the latter several private FM stations in Kam- at March 1999.

Figure 2.6: Mass Media Online

The New Vision newspaper and Radio Simba web sites

Source: As captured June 2000 from www.newvision.co.ug and www.simbafm.com.

19 Uganda Case Study

Table 2.7: Broadcasting indicators

Indicator Value Source

Radio sets 2’600’000 UNESCO 1997 Radio sets per 1’000 inhabitants 130 UNESCO 1997

Television sets 315’000 UNESCO 1997 Televisions per 1’000 inhabitants 16 UNESCO 1997

Television households 200’000 MultiChoice, March 1999 Households with a television 4.5%

Pay TV subscribers 3’953 MultiChoice, March 1999

Source: ITU adapted from Sources shown.

5 In October 2000, UTL signed an agreement with Alcatel for a GSM mobile network. The network is targeted for completion by December 2001. See “Uganda Telecom Limited and Alcatel sign Agreement” at http:// www.uganda.co.ug/investment/utl_alcatel.htm. 6 In a curious conflict of interest, IFC also acted as the Ministry’s advisor for the privatization of UTL. 7 Celtel was in the process of applying for an ISP license in February 2000. 8 International Finance Corporation. “Uganda Privatizes Telecom Utility with IFC Help.” IFC Press Release. 24 February 2000. Washington DC. http://www.ifc.org/pressroom/Archive/2000/00_95/00_95.html. 9 See paper presented by Ant Brooks, on the role of the regulator in the Internet market, at ITU/CTO “African Internet and Telecoms Summit”, the Gambia, 5-9 June 2000, available on the ITU web site at http://www.itu.int/ti/africansummit.htm. 10 For example all three have been examining national ICT policies. 11 Although neither UTL or MTN Uganda currently provide ISP service, they are free to provide any telecommunication service without applying for a license. 12 According to an e-mail sent from Charles Musisi to Steven G. Huter of the Network Start-up Research Centre (NSRC) entitled “The Internet in Uganda (3/99)”. See the NSRC site at http://www.nsrc.org/db/lookup/ISO=UG. 13 Serugo Moses. “Cyber-café’s take off in Kampala.” The Monitor (Uganda). 23 February 2000. Page 22. 14 Internet Moves: Africa Online Uganda Acquires Local Player”. Africa Online Press Release. 22 March 2000. Kampala. http://www.africaonline.co.ke/uganda/pressrelease1.html. 15 See MSI. “MSI acquires leading Ugandan ISP”. Press Release. 24 October 2000. 16 One constraint for FM radio in Uganda is that most vehicles cannot receive the full FM band. “Over 85% of vehicles in Uganda are Japanese reconditioned vehicles originally meant to stay in Japan. Therefore the radios in these reconditioned vehicles stop at 90MHz. Unlike the rest of the world, the Japanese FM spectrum is legally constrained to 76 - 90MHZ.” Source: http://www.uganda.co.ug/radioone/.

20 3. Internet strategy & policy

3. Internet strategy & policy

3.1 Role of incumbent telecom that service quality is often poor; oth- operator in Internet ers have stated that the relationship and service is good. UTL, the incumbent telecom operator in Uganda, has thus far kept a very UTL does provide a limited, proprietary low Internet profile. It does not offer data service with around ten clients either retail or wholesale Internet (using an X.25 network). services nor, at the time of this re- port, even have a web site. Nonethe- 3.2 Pricing structure for less, it is indirectly involved in the Internet services Internet through the provision of in- coming telephone lines to ISPs and Despite a competitive ISP market, earns increasing revenues from dial- Internet tariffs in Uganda are relatively up Internet traffic. high. The standard tariff is US$ 50 per month for unlimited access (tariffs are A major factor contributing to UTL’s priced in US$). There are no other vari- lack of Internet ambition has been its ations other than full or e-mail-only drawn out privatization process, which access. Tariffs are comparable to East has left a void in the company’s stra- African countries but are high com- tegic development. It has been reluc- pared to other African countries. For tant to make any major moves until example, unlimited access in Botswana the new owners have taken over man- is only US$ 16 per month (see Ta- agement control of the company. An ble 3.1). The lack of a low cost entry- Internet business plan has been pre- level package effectively limits Internet pared for UTL recommending that, access to the well-off in Uganda. among other things, it become a re- tail ISP itself and directly provide In addition to the ISP charge, dial-in Internet services to the public. UTL is users have to pay local telephone call certainly well poised to play a bigger charges, which for an average user, role in the Internet. It has the only exceeds the ISP charge. For example, significant nationwide fixed-line net- one estimate puts average Internet work that it could leverage and up- use in Uganda at about one hour a grade to provide quality Internet day or 30 hours a month. The tele- services. It could also use its existing phone usage charge would international voice backbone to de- amount to US$ 93.10, US$ 55.86 or velop an international data gateway. US$ 31.03 respectively for peak, off- On the minus side, UTL is weak in in- peak or weekend use. Added to the formation technology experience and ISP charge, the total cost of dial-up skills as well as customer focus. This Internet access ranges from US$ 81 – might be addressed by new manage- US$ 143 per month depending on ment as well as by linking up with an peak or off-peak usage. At these existing ISP in Uganda or a foreign one. prices, the leased line offering of However, this could conflict with plans US$ 200 per month for unlimited ac- to also provide mobile cellular service cess (with no telephone usage charge since it would be difficult—resource- and 64 kbps bandwidth) begins to look and staff-wise—to provide both ser- attractive. To put Internet pricing in vices successfully in a short time span. perspective, the average GDP per capita in Uganda is US$ 287 (1998). UTL has a mixed record among its Internet access prices are between 3 - current service to ISPs in providing 6 times more than GDP per capita so telephone lines. Some ISPs complain clearly out of reach of most of the that they have been overcharged and population.

21 Uganda Case Study

Table 3.1: Internet access prices in Africa

Unlimited monthly access, ISP charge, US$, February 2000

Country ISP Package Connection Subscription

Uganda Infocom Internet $ 50 $ 50 Kenya NairobiNet Internet $ 16 $ 128 Tanzania Internet Africa Internet $ 100 $ 50 Burkina Faso Onatel $ 23 $ 23 Zimbabwe Internet Unlimited Private Diamond $ 39 Botswana Mega Unlimited $ 11 $ 16

E-mail only: Kenya NairobiNet Email $ 16 $ 24 Tanzania Cyber Twiga Email $ 36 Uganda Infocom Email $ 30 $ 30

Source: ITU adapted from ISP data.

Further exasperating the situation is can be issued. License types and fees that there is no “Internet-friendly” vary depending on the type of service tariff program for the telephone us- (see Table 3.2). There is some confu- age charge. There is no nation-wide sion as to whether a license applica- dial prefix for Internet access mean- tion fee is required. ISPs are also ing that users located outside an ISP’s required to pay one per cent of their Point of Presence (POP) (basically the annual revenue to UCC as a contribu- whole country outside Kampala) will tion to the RCDF. It has been inferred incur long distance call charges. Us- that, as a consequence, ISPs are ers within an ISP’s POP area pay the underreporting their subscriber counts local call charge; there is no provision in order to give the impression that for reduced tariffs for Internet access. their revenues are less than expected. Also, it is believed that some Since the majority of Ugandans can- cybercafés are operating without li- not afford current Internet access censes. prices or an individual personal com- puter, one alternative would be access ISPs can provide their own interna- at public locations. But even here, tional connectivity if they have an prices are beyond the reach of most “International data gateway” license, inhabitants. For example, one cyber which includes the right to provide café charges Ush 750 for five minutes Internet access service. ISPs can of Internet access (around also provide domestic wireless leased US$ 0.50 or US$ 6 per hour). Given lines to users. Some are doing this that around 90 per cent of the popu- using microwave technology. This lation lives on less than US$ 2 per day, requires a “2.4 GHz device and wire- Internet use is problematic. less spread spectrum” license (US$ 2’000/ year). It is not clear 3.3 Regulatory status of whether ISPs could provide “wired” Internet leased lines. Some have complained that existing service offerings from 3.3.1 Internet Service Provider the existing fixed-line providers are (ISP) market limited or service is poor. For exam- The ISP market is competitive. It re- ple, UTL does not seem able to pro- quires a license from UCC. There is vide leased lines of sufficient no limit on the number of licenses that bandwidth or in a timely matter. MTN

22 3. Internet strategy & policy

Table 3.2: Internet licenses

Type Number issued Amount

Internet access services 4 US$ 2’000 / year International data gateway and Internet access service 5 US$ 4’000 / year Public Internet service (e.g., cybercafé) 3 US$ 500 / year E-mail access service 1 US$ 500 / year

Source: ITU adapted from UCC information.

only provides primary rate interface school name, business name ISDN as a high-speed option. This or non-profit organisation poses problems for ISPs. First, they name would be required to invest in ISDN modems. Second, they often do not The Internet Software Consortium re- need all the virtual lines (30) that ported 139 reachable hosts under the come with the offering but must still .ug ccTLD in its January 2000 survey. pay for them. Third, the dial prefix for The RIPE survey reported 180 reach- MTN’s ISDN service is the same as its able .ug hosts in December 1999. The mobile service so users would be growth of .ug hosts had been moder- charged at a mobile rate. ate since 1998, suggesting that either most Ugandan organizations aware of There is as yet no national peering for the Internet have already registered domestic Internet traffic. or they are using other TLDs (e.g., “.com”, see Figure 3.1). It should be 3.3.2 Top level domain name noted that many, if not most web sites in Uganda, do not use the .ug domain Charles Musisi of Uganda OnLine is the name. Part of the reason is that the administrator for the Uganda country domain registration is not considered code top level domain (ccTLD, (“.ug”).17 to be handled by a neutral party and The following conditions apply: thus most ISPs prefer to register hosts using a generic TLD. Mr. Musisi · Domains are registered at a rate counters that he processes the regis- of US$ 50 per annum (Febru- trations in an orderly, transparent and ary 2000) professional manner. He is concerned that if responsibility is transferred to · The entity operating the domain another party, it will not be handled must be operating in Uganda properly. Unlike other ccTLDs such as .nu, .tm, or .tv, there does not ap- · The domain must be used within pear to be as much “cachet” with .ug. 3 months or must be relinquished Thus, there is little scope for commer- cializing the .ug ccTLD. · Domains are available as follows: 3.4 Universal access

- Top Level Domain-ug With less than one per cent of the - Second Level -ac(academic), population having a telephone line and co (corporate),or (organi- an even smaller percentage having zation), go (government body) Internet access, the diffusion of com- - Third Level- chosen with munication technology is clearly a consultation of the major challenge for Uganda. The main administrator, and can be a government policy for improving ac-

23 Uganda Case Study

Figure 3.1: Uganda's domain name · At the begin- ning of the year Number of .ug hosts, 1995-2000 2000, Uganda had around 2000 public +RVWVÃUHDFKDEOHÃXQGHUÃXJ payphones, roughly  split between UTL and MTN. The lat-  ter has been active in putting in pay- phones, including  most recently, a  pre-fabricated shel-  ter, housing a number of wall- mounted units (see      Figure 3.2). Both operators are sup- posed to meet Note: The .ug domain first became active in 1995. payphone installa- Source: ITU adapted from www.isc.com. tion targets. While payphones per se do not provide cess—apart from the inherent benefits Internet access they can be a of introducing competition in order to starting point. For example, MTN foster greater supply of infrastruc- mentioned that it may one day in- ture18 —is to mandate a certain stall payphones with computer number of telephone lines and keyboards. Also, since an opera- payphones that the full license opera- tor mans its payphone shelter, tors (UTL and MTN) must install. There personal computers with Internet is a requirement to install a certain access could be easily installed and number of each in specific localities supervised. to enhance rural access but otherwise operators are free to choose where to · The private sector has been ac- construct facilities. The targets are in tive in providing public telecom line with the government’s policy to access. The public payphone and achieve a telephone density of two by call centre market has been liber- 2006. There are also plans to allow alized for several years and any- operators to draw on a planned rural one can enter the market by development fund to subsidize the in- applying for a license. However, it stallation of networks in rural areas. is worth noting that one major Supposedly, new companies could be public call centre operator, licensed to provide only rural service Starcom, has been retreating from if the incumbents choose not to do so. the market. Reasons cited for this There is no specific Internet compo- include greater availability of cel- nent in Uganda’s current universal lular handsets with pre-paid cards, access policy. more public payphones, and the growing number of cyber cafés The wisdom of the government’s line that are siphoning off ancillary call installation target policy is question- centre services such as faxing. able. With an official waiting list of less 1999 witnessed an explosion of than 10’000 people, the demand for cyber cafés in Kampala. There individual telephone lines is theoreti- were at least ten in operation by cally not there. Therefore it seems that February 2000 (see Table 3.3). efforts should be concentrated on pro- However, this phenomenon has yet viding telephones and Internet access to reach other areas of the coun- in public locations. This is being pur- try19. The Uganda Post Office has sued through government targets also introduced e-mail at its main mentioned earlier, private sector ini- branch in Kampala, as well as two tiatives and donor assistance: other towns. It has been in con-

24 3. Internet strategy & policy

Figure 3.2: Public payphone shelter

MTN payphone shelter in Kampala

Source: ITU.

tact with potential private partners in Uganda are now hooked-up to about extending connectivity and the Internet through this project. public Internet access at its other CelTel, one of the mobile opera- branches. Africa Online plans to tors, has assisted in this endeav- install its “E-touch” public access our even though it is not legally points at a number of locations. required to contribute to public access. Also of note are several · Foreign assistance has also been foreign-funded IT projects at helpful for enhancing mass access Makerere University that are ena- to the Internet. Uganda was the bling greater networking connec- first pilot country for The World tivity and Internet access for its Bank’s “WorLD” program (see Sec- students. Several Multipurpose tion 4.3), which provides assist- Community Telecentres have also ance to connect secondary schools been installed in villages (see to the Internet. Around 20 schools Box 3.1).

Table 3.3: Cybercafés in Kampala

February 2000

Internet café Number of PCs

Shell n.a. Shell Bugolobi n.a. Cyberworld Café 22 Web Café (Udyan House) 5 Cyberdome Café 16 Post Office (UPL) 2 Aptech n.a. Makerere University n.a. German Cultural Society n.a. Alliance Francaise n.a.

Source: ITU, UCC, The Monitor Newspaper.

25 Uganda Case Study

Box 3.1: The Ugandan Telecentre experience

Multipurpose Community Telecentres (MCTs) A third MCT is located in Buwama, about have been hailed as a promising solution for 64 kilometres from Kampala. Like Nakaseke enhancing information and telecommunication this is a rural area with most people engaged access in rural areas. An MCT is a kind of su- in farming. Some are also involved in fishing per cyber café. In addition to Internet access, since the area borders Lake Victoria. Like the MCT offers telephone service, faxing, pho- Nabweru, this MCT is funded by IDRC and it tocopying and sometimes a library and audio- started operations in June 1999. At the time visual facilities. MCTs should be supported and of a September 1999 evaluation, the telephone sustained by the community and supply a cost- line had not yet become operational so Internet based service, provide relevant content and in- services were not available. formation and offer a venue for training. An MCT is typically located where there is limited In addition to the three MCTs, there is Bunyoro communication access and where entrepre- Community Telecentre, located at the Hoima neurs have not perceived a viable market op- Teachers Resource Centre, about 200 kilome- portunity. Therefore, MCTs are traditionally tres from Kampala. Uganda Connect helped to implemented with bi-lateral and multi-lateral set this up, using recycled PCs and other do- assistance. nated equipment. Uganda Connect has also helped with a ‘mini-telecentre’ in Kihihi. Elec- While MCTs sound good in theory, in reality, tricity is provided by solar panels and it is con- few have actually been installed around the nected to the Internet by HF radio. world. One reason is the large cost not only of obtaining equipment but also of transporting One of the ironies of MCTs is that there is a it to remote locations. With a large rural popu- perception that they create the same sort of lation, Uganda has been an active test bed for ‘digital divide’ that they were supposed to over- MCTs. It provides an interesting case because come. For example, many of the inhabitants several evaluations have been made of the of Nakaseke are illiterate farmers who do not MCTs that have been implemented. speak English. They perceive the MCT as some- thing for the educated elite and the only serv- The first MCT was launched in March 1999. It ices they could use are the telephone, is located in Nakaseke, a village about 50 kilo- photocopier and video.20 Another perception metres from Kampala. This MCT is a project of is that the MCT is for government use. This is ITU, IDRC, UNESCO and several other bi-lat- reinforced in the case of the Nabweru MCT, eral and local partners. The Nakaseke MCT has which is situated in a sub-county administra- a library with around 3’000 books as well as tive headquarters, with the police station and some newspapers and magazines, one televi- local jail next door. This location has discour- sion and video-recorder, five computers, one aged some potential users from going. printer, one scanner, two telephone lines, a fax machine and a photocopier. The telephone lines Despite the inevitable teething pains these MCTs have been beset with problems with frequent are experiencing, they could prove beneficial for failures. The power supply is also unreliable. rural users. A survey of potential users found The most popular service is the photocopying that the majority communicated with Kampala machine while the least used is the fax. by travelling there personally or sending a mes- sage through contacts. This is because the post The Nabweru MCT is funded by Canada’s IDRC. is considered unreliable and takes too long and It is only around five kilometres from Kampala telephones are scarce. The ability to use an MCT with farmers making up a smaller proportion to make a call or send a fax or e-mail would of the potential user community than the other save travel time and transportation costs. Ac- MCTs. Nabweru MCT was launched in May 1999. cess to the Internet would also provide badly There is no library but otherwise it has the needed information on farming techniques, lo- same facilities as the other MCTs. Like the other cal markets and prices and health. Suggestions MCTs, there are problems with the telephone for enhancing the value of MCTs include provid- line exasperated by common usage between ing more relevant content in local languages and Internet, faxing and telephone calls. Only one functionality for ‘broadcasting’ personal an- of the five computers is connected to the nouncements such as births, weddings and fu- Internet. nerals to radio stations in Kampala.

26 3. Internet strategy & policy

Box Figure 3.1: Rural communications

3ULPDU\ÃPHDQVÃRIÃFRPPXQLFDWLRQÃEHWZHHQÃ1DEZHUXÃ ,QIRUPDWLRQÃSRWHQWLDOÃXVHUVÃQHHG Ã%XZDPDÃDQGÃ.DPSDOD How to improve È Telephone 1% product/service

Market È Letter 13% opportunities

Messenger 14% Health care È

Education / Travel 46% È New skills

Note: Left chart: based on a 690 person sample in Nabweru and Buwama. Right chart: based on a 1’000 person sample. Source: Kyabwe and Kibombo.

17 Information about registering a host under the .ug domain is available at http://www.registry.co.ug. 18 For example the number of telephone subscribers has doubled since the entry of MTN into the market. Equally important for enhancing access has been the impact of wireless technology and pre-paid cards. The latter has been particularly relevant for a cash-based economy where credit is hard to obtain and many would not qualify for subscription-based telecom services. 19 One ‘up-country’ cyber café is The Source Café, the first Internet node outside Kampala. 20 “There is among community people a perception that the centre is for the educated people ” See Mona Dahms. For the Educated People only Reflections on a Visit to two Multipurpose Community Telecentres in Uganda. www.idrc.ca./telecentre/evaluation/html/14_For.html.

27 Uganda Case Study

4. Sector absorption

4.1 Government institutions that are online. All this adds to a sense of confusion and With only a few exceptions, comput- clearly suggests the need for one in- ers within government departments tegrated, government-operated web and agencies are used for administra- site. tive processes such as word process- ing or spread sheet analysis. Very few Senior government officials have at- have Internet access and of those that tributed the limited use of computers do, most are using it only for e-mail. in various ministries to two major fac- Few government ministries or agen- tors – the lack of awareness of the use cies are online (see Table 4.1). Of of computers as information and com- those that are, less than a handful munications tools, and the high price have their own web site with the rest of computers and other Information using pages hosted by others. For and Communication Technology (ICT) example, there is a web page hosted components. The use of the few com- by Uganda Web Pages that claims to puters available does not in general ad- be the web site for the Government vance ICT skills – the PCs tend to be of Uganda (http://www.uganda.co.ug/ used mechanically for the processes govern). However, this web page pro- directly related to the functions re- vides limited information and does not quired, and do not therefore contrib- provide links to the few government ute towards improving computer literacy. For exam- ple, two reports Box 4.1: Uganda Government Web Presence received during in- terviews for this Of the top 20 Uganda web sites listed in a popular World survey, indicated Wide Web search engine, only one was directly linked to a that government- Government agency – the Privatization Unit within the owned financial Ministry of Finance (http://www.perds.go.ug) The second and banking insti- most informative web site found was “Uganda–The pearl tutions had devel- of Africa” (http://www.uganda.co.ug). This private web oped relatively site is linked to the Privatization Unit web site, and pro- sophisticated vides most of the information and data. Other web sites covered tourism, culture and history, ecology, and ISP pub- computer sys- licity. The only health related site, (http://www.tripprep tems but, due to .com) seems to focus on health risks for visitors to Uganda. security and other concerns, users were not encour- aged to develop computer skills other than those needed for imme- diate tasks. The government did not, therefore, contribute to- wards improving the computer lit- eracy levels of their own staff.

A third important factor identified

28 4. Sector absorbtion

Table 4.1: Uganda government web sites

June 2000

National institutions Web page / site

Parliament of Uganda www.parliament.go.ug Government of Uganda www.uganda.co.ug/govern Office of the Vice President www.ovpuganda.net Ministry of Education and Sports www.educationsectoruganda.com Ministry of Finance, Planning and Economic Develop- ment (MFPED) Uganda Privatization Program: PERDS www.perds.go.ug Population Secretariat www.uganda.co.ug/population Ministry of Tourism, Trade and Industry Uganda National Bureau of Standards (UNBS) www.uganda.co.ug/unbs.htm National Environment Management Authority www.uganda.co.ug/nema Ministry of Works, Housing and Communications www.miniworks.go.ug Uganda Police Training Planning Unit (TPU) www.geocities.com/Athens/Forum/7383/ Uganda Revenue Authority (URA) www.ura.go.ug Capital Markets Authority (CMA) www.ugandacapitalmarkets.co.ug Uganda Tourist Board (UTB) www.utbsite.com www.visituganda.com www.africa-insites.com/uganda Uganda AIDS Commission (UAC) National AIDS Documentation and Information Centre (NADIC) www.uganda.co.ug/nadic www.bou.or.ug Office of the Inspector General of Government www.uganda.co.ug/igg Interim Electoral Commission www.imul.com/interim Uganda Investsment Authority www.ugandainvest.com

Source: ITU adapted from http://www.gksoft.com/govt/en/ug.html.

during interviews is the relatively high A fourth factor inhibiting the use of ICT dependence on international donor in governance is the poorly developed assistance for the modernization of the telecommunications infrastructure. processes of governance, which often Government processes must focus on include relatively sophisticated ICT the entire nation, but, with more than based management systems.21 These 80 per cent of the population residing development programs tend to focus in rural areas with virtually no access on the processes themselves, and the to basic telecommunication services information systems needed for their and reliable electrical power, there is operation. They tend to be driven by little incentive to consider ICT as a computer literate international con- useful tool for improving the govern- sultants, who do not have the time to ment’s effectiveness. develop internal champions to pro- mote computer literacy in the govern- Despite the many discouraging factors ment departments and institutions outlined above, there is a growing concerned. optimism in Uganda as a whole that

29 Uganda Case Study

ICT processes will be introduced, and computers and telecommunica- that the process of governance will tion systems is duty-free. be improved through the use of mod- ern ICT tools. This growing optimism · Simple regulatory processes is demonstrated by the following de- for ICT development. The na- velopments: tional regulatory framework has been designed to encourage · Recognition of the impor- growth of the ICT sector in an tance of ICT, and a clear vi- orderly manner. Where protec- sion for its progressive tion of new entrants to the sec- introduction. The most dra- tor is required, such protection matic demonstration of this vi- is provided transparently with sion is the liberalization of the clearly defined time limits. New telecommunication sector, entrants outside these controlled which has resulted in one of the sectors are encouraged through highest growth rates of access simple and rapid licensing appli- on the African continent. Access cation and approval systems. to basic telecommunication via both fixed and mobile services The following sections provide a brief has increased more than five- outline of the initiatives in specific fold since the start of sector lib- Government departments and institu- eralization in 1994. While fixed tions, for the development of ICT in- line telecommunication services frastructure and its utilization. have stagnated, the disposal of 51 per cent of shares in UTL to 4.1.1 Communications a foreign strategic investor con- sortium provides grounds for re- The Ministry of Works, Housing and newed optimism. Communication would like to play a lead role in the development of ICT · ICT Policy. The Hon. Minister of infrastructure and utilization. The Works, Housing and Communica- successes achieved to date are highly tions has further demonstrated significant but indications are that the national vision by outlining use of ICT technologies and proc- the Government’s plans to de- esses within the ministry itself are velop a clear ICT policy. The relatively underdeveloped. The few policy under consideration will computers installed in the ministry build on recent sector successes, are primarily used for administrative and encourage even more rapid tasks, although some have been growth of the whole ICT sector equipped with dial-up modems and over and beyond the telecommu- have e-mail connections through nications component currently in various ISPs. There was very little focus, through broad national evidence of the use of e-mail or the consultation and consensus Internet to conduct ministerial busi- building encompassing all na- ness communications. However, a tional stakeholders. This ITU strong desire for the development of study was welcomed by the Min- ICT within the ministry was ex- ister, who looked forward to in- pressed during interviews, and it is corporating the findings of the expected that the ministry will de- study in developing the planned velop its own ICT networks and proc- ICT policy. esses as it formulates policy for this sector. · Other Government support for ICT development. National The Ministry of Works, Housing and Government support for ICT Communications has access to ICT growth initiatives is clearly dem- knowledge through its control of gov- onstrated by the Government’s ernment stakes in UTL and the postal decision to eliminate all customs services operator, UPL. Although both tariffs on the importation of ICT these organizations have yet to de- equipment – the importation of velop full ICT skills, they are well

30 4. Sector absorbtion

placed to assist their parent ministry. skills for use in postal operations. UTL has valuable telecommunication During interviews with UPL execu- skills, as the incumbent fixed line tel- tives, a high level of enthusiasm for ecommunications network operator, ICT was demonstrated. UPL has es- but generally lacks computer and ad- tablish its own web site (http:// vanced ICT networking skills. These www.ugandapost. com). It has also are likely to be provided in the short embarked on the development of term through its strategic equity part- public e-mail and Internet services ners. UTL has about 100 PCs, nearly to supplement its postal services, on all of which are used primarily for ad- e-commerce to promote and market ministrative purposes. its philatelic business, and on other ICT services such as mail and parcel Since the separation of posts from tracking and delivery control. UPL telecommunication services, UPL has has plans to install local and wide focused much of its attention on de- area networks for its internal and veloping new skills for its own sur- geographically diverse presence. UPL vival. Prior to the separation, the is therefore likely to develop useful ICT forerunner of UPL depended largely skills in the near future, which will not on subsidies from the earnings of tel- only improve its own effectiveness, but ecommunication services. Part of this may also contribute to the ICT knowl- survival strategy is to develop ICT edge base of its parent ministry.

Box 4.2: Digital Posts

Postal services have traditionally formed part of the office in Kampala as well as the towns of Soroti and communications sector. In many countries this was Jinja and plans to extend the service to all regional institutionalized through a combined post and tele- offices.22 UPL has also been in talks with ISPs about communication operator, such as Uganda with the a possible franchise agreement to provide public Uganda Posts and Telecommunication Corporation. Internet services from post offices. UPL could also The wave of reform sweeping the telecommunica- consider leveraging its 65’000 private letterboxes tion sector over the last decade has instilled the into a nationwide ‘virtual’ letterbox for all Ugan- notion that the often loss-making, employee- dans. bloated, old-fashioned postal service should be separated from telecommunications. Like many Another advantage is parcel delivery. UPL has faced countries, Uganda went through this so-called re- considerable competition in this area with private structuring exercise and separated posts and tel- courier services allowed to operate in Uganda since ecommunications in 1998. 1989. It estimates that it has around 40 per cent of the market. One disadvantage for UPL is that, un- A popular scenario envisaged the slow death of like the private couriers, it has a universal service national post offices. On the one hand, growing obligation to try to ensure postal service availabil- competition from dynamic courier services would ity in all parts of the country. The advent of e-com- eat into one of the few profit-making areas. On the merce could be a boost for UPL as users increasingly other hand, new electronic services such as fax and turn to the Internet to order products and want e-mail would erase the need for letters. However, speedy delivery. Though business-to-consumer e- the national postal service has some inherent ad- commerce is practically non-existent in Uganda, this vantages that it could exploit to transform itself is bound to change. UPL is already gaining experi- into a leading cyber player. Uganda Posts Limited ence in this area through two fronts. On the one (UPL) recognizes this and is beginning to embark hand, it has implemented a package tracing facility in a digital direction. on its web site. On the other hand, UPL itself is engaged in a crude form of e-commerce through One advantage is that the post office is a regularly the marketing of stamps on its web site. visited public location. UPL probably has one of the largest presences in the country with nine regional It is ironic that in Uganda at least the postal sector offices, 70 departmental offices and 236 sub post seems to be a lot more aware and active in Internet offices. UPL is well aware that its network of offices activities than the telecom operators. However UPL could be leveraged to provide public Internet serv- must first overcome the public perception of long ices—regional and departmental offices are delays for postal delivery if it is to convince them equipped with telephones—and indeed has started of its readiness for the digital age. to do so. It offers e-mail service at the main post

31 Uganda Case Study

4.1.2 Finance required to maximize the effective- ness of ICT services. Although the Ministry of Finance was not directly included in the survey, key Although direct interviews with the institutions within the ministry such Privatization Unit within the Ministry as the Bureau of Statistics, and the of Finance were not conducted, infor- Commercial Bank of Uganda, provided mation provided indicates that this valuable information for the prepara- unit has ICT capacity, which can con- tion of this report. The Ministry of Fi- tribute well to the ICT knowledge base nance itself has virtually no ICT of its parent ministry. The information presence besides a few autonomous available, however, tends to suggest organizations within its area of respon- that the ICT capacity within the Pri- sibility, such as the Bureau of Statis- vatization Unit has been driven more tics and the Privatization Unit. The by the needs and interests of the in- Ministry of Finance has a single main- ternational donors providing technical frame computer used exclusively for assistance to the unit, than by the pay-roll support of all public service national members of the unit itself. A ministries, and a small number of close examination of the Privatization stand-alone PCs for administrative and Unit web site, http://www.perds.go. analytical processes needed for its ug, tends to support this assumption. normal functions. Crucial information, such as the de- scription of the privatization of the The largest user of ICT in the Ministry telecommunication sector, is found in of Finance appears to be Uganda Com- a linked private web site, which itself mercial Bank (UCB), which is being contains minimal information. privatized. Dr. Ham-Mukasa Mulira heads UCB’s Management Infor