Internet Service Providers in Uganda, which last week were gearing up to take the government to court over changes to licences and an increase in fees of more than 1000%, have backed down after negotiations made headway.
Kenneth Muhangi, from KTA Advocates in Kampala, representing the Internet Service Providers Association of Uganda, has told Africa Legal that the petition for a judicial review of unilateral changes to the Uganda Communication (Fees and Fines) (Amendment) Regulations 2020, had been withdrawn.
The ISPs wanted the proposed changes put to Parliament, as is required by law, and they want an opportunity to have a say in what comes next, he said.
“They cannot simply impose this on an industry without any consultation.”
The withdrawal of the petition followed a week of high drama that pitted the country’s 25-year-old billion dollar industry against the government – named in court papers as the Uganda Communications Commission and the Attorney General.
The industry players had accused the government of forcing the industry to its knees with the massive fee increases in the middle of a business cycle.
“We appreciate the government wants to ensure that the internet service provided to Ugandans is affordable and comprehensive – that is something we all agree on – but you cannot change the rules half-way through the game,” Muhangi said.
Late last week, in a letter to the Minister of ICT, the Executive Director of the Uganda Communications Commission, Irene Kaggwa Sewankambo, laid out what the government wanted.
that ISPs could be granted either a National Public Infrastructure Provider licence or a National Public Service Provider Licence – but not both;
that with an infrastructure licence they could hold two Regional Public Infrastructure Providers Licences, and;
that holders of the national licences pay a fee of US$ 60,000 or 0.89% of their gross annual revenue (whichever was higher);
that an operator who only had a National Service Providers Licence and not a regional infrastructure licence pay $20,000 in fees.
The Internet Service Providers Association of Uganda, whose members facilitate interconnectivity across East and Central Africa, service a market worth $118 million.
The industry has one of the highest rates of tax compliance in Uganda with a total tax contribution of about 200 billion Uganda Shillings last year.
The ISPs connect almost 80% of private sector enterprises including private homes, hotels, banks, finance institutions, education Institutions, corporates and the government. Governments Ministries and Departments, Businesses Corporate and Consumer.
Muhangi said the fees that were being proposed were “exorbitant” and the licence restrictions “crippling” for service providers, many of which had invested millions of dollars in developing infrastructure which they were now being asked to abandon or hand-over to someone else.
“This has far reaching implications given that many of the members are invested countrywide over the past 25 years. The licence categories proposed didn't take into account that the past licencing regimes allowed the ISPs to develop infrastructure and sell services nationally. Any changes to the licences should preserve the past investments of ISPs.”
He also explained that the last increment of fees and fines had been in November 2017 (An increment from USD$10,000 to $30,000 for the NPIP).
“Given this informed ISPs business planning and forecasting cycles (5-year cycles) a massive increment in regulatory cost now has drastic operational implications to their business plans.”
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