Ugandan telecommunications analysts and observers are worried that the country is on the precipice of another telecom battle between mobile operators after the Uganda Communications Commission (UCC) announced a new draft notice on a price floor that limits further reduction in interconnect rates. The new move will be finalized by the end of this month, UCC officials said. It means, according to John Yumail, a Kenyan mobile sector analyst and researcher, that companies will begin to look at other ways to reduce costs and undercut the current market. “What we are likely to see is continued price wars in other areas, possible connection fees altogether, so it will be interesting to observe next month how things play out,” he said, adding that the UCC “is doing something that is vital, but they must also begin to look at plans to ensure there are no more price wars or battles between companies because this would mean services and job losses.” One official within the UCC, who was not authorized to speak to the media, said the new regulation is aimed at ensuring consumers' protection for the coming months and years. “What is probably going to happen is some of the operators, the smaller ones or those who can't compete, will go out of business and we will eventually see the prices return to a normal market level where companies can survive on a regular basis.” In comments published by New Vision website of Uganda, Uganda Telecom's active boss Donald Nyakairu said that the telecom sector in the country has already deregulated and added that the UCC's directive is “unrealistic and unfavorable to consumers. “The setting of ceilings shows that the regulator is back tracking on its commitment of deregulating the industry fully. It probably thinks it made a mistake in licensing many players,” he said. BM
