Ugandan telecommunications analysts have expressed concern about an imminent price war in the industry.
This comes on the back of the Uganda Communications Commission (UCC) announcing a new draft notice that limits further reductions in interconnect rates.
UCC officials have indicated that the matter will be finalized by the end of this month.
John Yumail, a Kenyan mobile sector analyst and researcher says telecom companies will begin to look at other ways to reduce costs and undercut the current market.
“What we are likely to see is continued price wars in other areas, so it will be interesting to observe next month how things play out”.
“The UCC is doing something that is vital, but they must also begin to look at plans to ensure there are no more price wars or battles between companies because this would mean job losses,” says Yumail.
One official within the UCC says the new regulation is aimed at protecting consumers.
“What is probably going to happen is some of the operators, the smaller ones or those who can’t compete, will go out of business and we will eventually see prices return to a more sustainable level.”
Uganda Telecom company secretary and legal officer Donald Nyakairu says that the telecom sector in the country has already deregulated and added that the UCC’s directive is unrealistic and unfavorable to consumers.
“The setting of ceilings shows that the regulator is back tracking on its commitment of deregulating the industry fully. It probably thinks it made a mistake in licensing many players,” says Nyakairu.
By: Andrew Matapare – ICT Senior Journalist
