LETTERS FROM KAMPALA
Ugandans are going places
Posted Tue, 17 Oct 2006
I am proud that Ugandans are going places. It may not be as fast as our neighbours in Kenya but we are on the right track, slowly but surely we shall get there.
This is happening in different sectors but the stock exchange will be a big beneficiary. For starters, Nile Bank is soon going to be listed on the Uganda Securities Exchange (USE). Nile Bank is a private bank which is a medium sized company, registered in Uganda, with shareholders from Uganda, Israel, and South Africa. Not only is Nile Bank in Uganda but it recently opened up a branch in Juba, Southern Sudan. The bank boasts of a customer base of 90000 in Uganda.
It is the first time a company is making an Initial Public Offer for the purpose of purely raising capital. Most of the companies, which have come to the USE lately, were either cross listings or done to re-distribute shareholding when the government was divesting ownership in a company. Issues regarding raising capital are critical to our economy. Most Ugandans are entrepreneurs in small and medium enterprises, which have enabled job creation which slowly should turn to wealth creation for the people.
It has not been easy for many of the upcoming and stable enterprises to access capital. However, entrepreneurship is on the rise in the country therefore matters on capital rising cannot be ignored if we intend to increase wealth and sustain it for several generations to come.
We are also going places in the telecommunications industry. Our Information, Communication and Technology (ICT) Minister has finally declared that investors can now apply to the Uganda Communications Commission (UCC) for licences under the new licensing regime to provide ICT services in the country. Currently we have three mobile phone companies in Uganda; Celtel, MTN and Uganda Telecoms (UTL). Celtel Uganda enjoyed a monopoly in this sub sector only until 1998 when MTN was awarded a license to operate in the country. In July 2000 Uganda UTL was awarded the national operator license enabling it to provide services in the whole country.
Under the current public service provider licence, all mobile phone companies are required to pay an annual licence fee of $10000 and an application fee of $2500. The fees regulations will also be applied to other public service provider companies that will offer fixed voice services, global mobile personal communications by satellite, Internet access, Internet exchange services for corporate companies and virtual private networks that are not provided over the Internet.
As expected, this did not go down without a fight as two of the operators have been trying to oppose this move. UTL and MTN are not too happy with the governmentï¿½s decision of being generous to others by opening up the sector to other service providers. According to the two unhappy companies, the governmentï¿½s plan does not address the primary obstacles that are essential to achieving a higher penetration of telecommunication services in the country. But according to Patrick Masambu, the Uganda Communications Commission Director General, MTNï¿½s and UTLï¿½s ï¿½duopolyï¿½ has expired and the new telecommunication policy requires the government to open up the sector to give a chance to other investors.
And our MPs in the ICT committee do have something to add to this heated discussion. They have been saying that they are concerned that leaving MTN and UTL to dominate the market will be hindering free competition for better and cheap services. Koki Member of Parliament, Erastus Mugumya Magulumaali says that competitors should not be limited to one sub sector in the ICT industry.
Magulumaali says this will enable consumers to benefit more in case other private companies are allowed in the market .
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