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Uganda government victim of telecom price wars

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The Ugandan government reported over the weekend that they have been hurt as a result of the ongoing price wars afflicting the country’s telecommunications sector. It comes as prices of call rates and other telecom services continue to drop dramatically as a result of the ongoing price battles between companies.

The Ugandan goverment has been the hardest hit by the price wars (image: stock.xchng)

Sparked by Warid Telecom in September 2010, the overall costs of call rates has dropped by as much as 80 percent among some companies, and the taxes incurred to the government has dramatically dropped as a result, government officials said.

“We are struggling to make infrastructure development a top priority and hope that the costs will go back up somewhat in the near future to limit the continued reduction that is hurting the overall telecom sector in Uganda,” an emailed statement from the ministry of communications said.

The Ush8 billion boost reflects only a 7 percent growth in government revenue from the telecoms compared to the 12.5 percent growth in service usage during the same period.

“The waning significance of industries such as the telecommunications has forced URA to tighten transfer pricing regulations and income tax regulations this financial year to boost revenue collection,” said the UCC.

Andrew Matapare

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