The telecom service provider, Airtel Uganda has been granted a Shs272 billion National Telecom Operator Licence to continue operating in Uganda.
The new licence is with effect from 1 July 2020 and is for a period of 20 years. Airtel Uganda applauded the Government of Uganda and the Uganda Communications Commission (UCC) for its cooperation on this important process.
Airtel Uganda had failed to secure an operational license after it expired in 2017. Upon expiry of their licence, Airtel applied for renewal of its public Service Provider (PSP) and Public Infrastructure Provider (PIP) License and paid the requisite $100,000 in November 2018. Its application for renewal has however been under scrutiny since it covered 50per cent of the geographical boundary.
This aimed at avoiding paying for the National Telecom Operator (NTO) license which they qualify for since they cover 50 per cent of the geographical boundary of the country.
The company has been operating on PSP and PIP License and this can explain why they were paying little amount of money compared to competitors MTN-Uganda.
“Airtel Uganda will retain its entire current spectrum subject to the law and terms of assignment. The scope of services will be the provision of basic telecommunication services, infrastructure services, and value-added telecommunication services. In addition, Airtel Uganda commits to achieving coverage of 90% of the geographical boundary of Uganda within five years of the effective date of the licence – with a minimum obligation of providing voice and data services,” reads in part of the statement released by Airtel.
Recently, UCC introduced new changes and currently there Six new license categories have been introduced: National Telecom Operator (NTO) license; National Public Service Provider (NPSP) License, Regional Public Service Provider (RPSP), National Public Infrastructure Provider (NPIP) License, Regional Public Infrastructure Provider (RPIP) License and License to provide Communal Access.
According to the new changes, if an operator covers over 65 per cent of the geographical boundary of Uganda, or operating in three regions they shall be eligible for a national license in the NTO or National PIP or PSP category. This can apply to MTN, Airtel, UTL and Africell.
Operators currently covering less than 65 per cent or operating in less than three regions will be eligible for a regional license. Any operator who currently only holds NTO licenses will continue operating as such in the new licensing framework.
For years, Airtel’s competitors have complained that its cheap licence has given it the advantage to drive aggressive pricing which has put pressure on yields across the sector.
Airtel has enjoyed a market advantage over rivals because, while its operating licences are valued in millions of dollars, the telco has been paying just $100,000 for its public service provider licence every five years.
That translates into an annual licence cost of just $20,000, compared with $5.8 million for its nearest competitor. Airtel Uganda made Shs229.8 million profits in 2017, the same Telecom Company that has been paying just Shs370 million for its public service provider license every five years.
