Uganda looks to increase fees for universal services

Players in Uganda's communications sector should brace themselves for a cut in their profit margins as the industry regulator looks to further boost the Rural Communications Development Fund (RCDF).

The RCDF funds communication projects for users in parts of the country that commercial players consider not viable financially. The RCDF is implemented around the world as part of the International Telecommunications Union's (ITU) universal access agenda. The first phase of the RCDF has resulted in improved access to communication services and the prices for these services have down considerably.

According to the draft policy for the second phase of the RCDF, the Uganda Communications Commission (UCC) needs US$17 million per year to finance increased coverage of the RCDF activities across the country.

The 1 percent levy off annual profits that operators pay to UCC today can only raise $4 million and according to the draft policy, that amount does not ensure sufficient RCDF funds.

However, players in the sector have cried foul, saying UCC should instead revise the levy downward, considering there are more players in the sector than was the case during the first phase.

"The law talks of a maximum of 2.5 percent and today we are still frugal at 1 percent," Patrick Masambu, the executive director UCC, said. "It is possible it can be revived downwards but it may go up if you look at the demand that still exists."

The draft policy has proposed the modernization and expansion of postal services by effectively supporting at least one initiative that aims to either modernize or expand coverage of postal services in Uganda.

The new RCDF will support the establishment of at least one community information center per underserved local area, as a profitable business providing essential ICT and related services (postal services, public pay phone, e-mail and Internet and financial services) aiming at a minimum of 150 community information centers per year.

To ensure easier sustainability, RCDF-supported centers should target viable points of population convergence such as trading centers, market sites, medium and large health units, local administration points and education institutions.

It will also support the establishment of IT laboratories with a minimum of 40 workstations with broadband access in a total of at least 200 educational institutions that are located in underserved areas per year.

RCDF will also support at least three collaborative initiatives each year to develop and disseminate local ICT content and its application in areas like health, education, market information, agriculture, local administration and commerce.

It will support at least two institutions of higher learning each year to undertake research that explores new ways of using ICT to support rural development.

The new RCDF will also help disseminate the findings and support the improvement of sustainability by providing entrepreneurial training (including business planning) for the managers of all new RCDF supported projects.

With the increased funding, the draft proposes jump-starting the utilization of renewable energy sources (such as wind and solar) to power rural ICT projects and encourage use of the national fiber backbone for the delivery of broadband to underserved communities.

This will be done by the fund supporting the establishment of at least four regional centers of excellence each year that demonstrate the use of new technologies to address the challenges of ICT delivery and utilization in rural areas.