The Ugandan government is losing out on much-needed revenues from telecommunications companies due to the lack of monitoring capacity of the Ugandan Communications Commission (UCC).
The UCC earns at least 27% of its revenue from the telecoms companies, which helps to keep it an autonomous and independent institution. However, it still lacks the capacity to verify revenue declarations by the telecoms companies.
Every year when the telecoms companies submit their financial statements, they are expected to remit 2% of their gross annual revenue (GAR) to the UCC. However, the Commission has not yet built the capacity for an independent review of the revenue figures reflected in the audited financial statements of the operators to counter the likelihood of audit risk or collusion.
During the last financial year there was a shortfall of almost 20% in the revenues budgeted for and actually collected. This is a significant loss of revenue.
All the stakeholders in the Ugandan telecommunications sector could benefit by more transparency and the ability to monitor transactions and provide accurate billing and effective governance.
Much has been written about various aspects of this issue in the daily press and elsewhere, and it should not be allowed to become controversial—either through procurement delays or through misunderstandings—because of the very clear benefits it could provide.
If the Ugandan government were to install a platform which would accurately invoice and account for all telecoms taxes, fees and surcharges, this would be beneficial for all the stakeholders concerned: government, telecommunications operators and consumers alike.
It would, in fact, be a very positive development for Uganda and its telecoms sector and has everything to do with accurate billing, monitoring and governance—and nothing to do with eavesdropping.
It is estimated that telecoms operators lose about USD40 billion a year due to fraud. The Ugandan Communications Commission (UCC) does not have an effective monitoring and anti-fraud system in place and telecoms fraud is costing the Ugandan government and taxpayers a significant amount annually.
A system like this would provide transparency for government and full visibility over the full spectrum of telecommunications services in Uganda. It would enable the Regulator to account for calls across all networks—in real time and, more importantly, would have no effect whatsoever on customers using the local networks as charges would only be levied on international inbound telephone calls.
It would enable a strong partnership to be established with multiple mobile operators to put all illegal traffic out of business and shut down illegal Simbox fraud.
Furthermore, it would enable the quality of service to be improved for consumers. A good example of this is Ghana where the traffic rate went down from 0.06 to 0.19 USD because of good management and governance.
Good governance costs less in the end. The key to good governance is transparency—this Uganda desperately needs in order to protect revenues that could be used for socio-economic development in the country.
However, if Uganda wishes to harness the power of telecommunications to fund sustainable development as other African countries like Tanzania have done, it must meet the challenges of changing market structures.
Uganda should create a balanced regulatory environment to support innovation while mitigating the risks as the right balance of regulations and costs to manage the risks will also provide the necessary enabling environment for mobile phone financial services to facilitate access for the poorer segments of society, and ultimately foster sustainable development.
Vanessa Gibson, the author, is a freelance writer, specialising in technology and ICT news, and have over 20 years’ experience in the writing industry.