East Africa: Why is Internet so expensive in Uganda compared to other countries in East Africa?

Uganda’s telecommunications companies have invested heavily in infrastructure services to increase internet access, but low user numbers have limited their ability to reduce internet costs for their customers, including SMEs.

This was disclosed by Enid Edroma, General Manager Corporate Affairs of MTN Uganda, who said that only 35% of their customers use smartphones.

“We also use only five percent of our underground internet cables, but operating costs remain the same,” he said.

Edroma said the increase in the number of internet users will lower the cost of the internet and ultimately stimulate digital activities, rekindling hopes for SMEs.

Currently, Uganda’s internet penetration is only 29.4% compared to Tanzania’s 38% and Kenya’s 53%.

But the government is reluctant to consider tax policies to encourage internet access.

For example, the government levies an 18% VAT, a 12% excise duty on new imported mobile phones, as well as other taxes on the internet, a move industry experts say has slowed the uptake of internet-enabled devices, especially smartphones. have ideally increased internet access and lowered internet costs.

It comes two months after MPs called on telecoms service providers to adopt more affordable data and voice packages.

ICT and National Steering Committee Chairman Moses Magogo told Parliament recently: “Uganda Communications Commission should also strengthen ties with telecommunications operators to develop and provide a wide range of packages that will encourage customers to access the internet and subscribe to calls.” .

Minister of State for Information and Communication Technology Joyce Nabbosa Ssebugwavo said during the recent Fintech Landscape Expo that the government is working with partners to achieve seamless internet connectivity that will bring down the cost of internet.

Meanwhile, telcos like MTN Uganda have partnered with Original End Manufacturers (OEMs) and smartphone dealers to subsidize the price of low-end smartphones that can be used to attract first-time users to the data market.

In April this year, the telco partnered with leading mobile phone brand itel to provide budget-friendly high-quality entry-level devices to accelerate smartphone penetration.

Under the deal, MTN Uganda is offering a free 3GB monthly data pack for three months for Itel devices connected to the MTN network. In addition, all devices enjoy a 100% data bonus for each data package purchased within the first 3 months on the MTN network.

Last June, MTN Uganda launched the Kabode Supa smartphone as part of its post-paid Mpola Mpola device financing scheme, which allows customers to buy smartphones but pay for the phone in installments.