INFORMATION AND COMMUNICATION TECHNOLOGY

(ICT) SECTOR CONTENTS 1 Back Ground to the ICT Sector. … … … … … … … … … … … … … … … … … … … .1 2 ICT Sector Outlook … … … … … … … … … … … … … … … … … … … … … … … … … .2 3 Policy and Regulatory Frame Works… … … … … … … … … … … … … … … … … ..5 4 Players in the ICT Sector in Uganda… … … … … … … … … … … … … … … … … ...7 5 Uganda’s ICT Success and Key Strengths Factors… … … … … … … … … … … 8 6 Communication Infrastructures and Technology… … … … … … … … … … … … 9 7 ICT Human Resource… … … … … … … … … … … … … … … … … … … … … … … … ..12 8 Traffic and Tariffs… … … … … … … … … … … … … … … … … … … … … … … … … … 13 9 Trends and Market Opportunities in ICT the Sector… … … … … … … … … … ..15 10 Postal Courier Services… … … … … … … … … … … … … … … … … … … … … … … .16 11 Special Incentives for ICT Sector… … … … … … … … … … … … … … … … … … … 17 Appendices Appendix 1… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 18 Appendix 2… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 19

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1 Background to the ICT sector. In 1993 Uganda licensed Celtel Uganda to provide mobile services and become the first country to adopt telecommunication liberalization policies within the region. This move has resulted into Uganda developing one of the most vibrant, dynamic/ competitive and best regulated ICT sector in Africa. The Information Communication Technology (ICT) sector normally encompasses the ICT manufacturing activities and ICT services activities. There are no recognisable ICT manufacturing activities in Uganda; therefore the ICT Industry now comprises only the services activities. Consequently, all the ICT products sold in the country are imported. . Because of it cross- cutting nature, the ICT sector plays a very big role in employment, job creation and quality/efficiency in other services delivery. A dynamic ICT sector contributes to the national economy and development. This contribution gives an indicative measure of its size. For decades, the ICT sector in Uganda has been revolving around the Telecommunications, Postal and Broadcasting services. This has been mainly voice, very limited data handling and mail deliveries.. The 1996 policy framework that liberalized telecommunication sub-sector resulted into radical changes that have given birth to an ICT service sector. The sector has been growing at a phenomenal rate over the last decade, especially in the areas of mobile devices, computer applications, information processing, storage and dissemination (Broadcasting and Internet Points of Presence at district levels). The growth changes have had a profound impact on the whole Ugandan economy or the ICT sector has become an important part of the economy 2 ICT Sector Outlook The ICT Sector has been recognised as one of the fastest growing sectors noticeable in, mobile telephony, broadcasting, e-finance, global connectivity and online trade. This reflects the increased use of ICT as there is sizable growth in e-business transactions amongst Ugandans and between Ugandan companies and oversees companies noticeably of Middle East, Europe and Asia. The local telemarketing through SMS and FM radios is playing a big role in economic development. Efforts by the Government towards e-governance, e-education, the rural transformation policy, financing frameworks and distance learning (global and local) is some of the good performance indictors in the sector. The statistical figures available show that the communications (telephony, data communication &broadcasting) sector grew more than 50%, reaching the peak in 2003/04.Competition and surge in investment expenditure in anticipation to pending opening up the telecommunication market substantially contributed to this growth. The sector grew by 33.3 % in 2006/07.(Figure 1)The planned increased government usage, competition forces and investment by the newly licensed operators is expected to push the growth further in the coming years.

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Figure 1 (Source. UCC Review of telecommunication sector August 2007)

The foreign exchange inflows (exports in form of software and outsourcing services) in the ICT sector are closely monitored as an indicator of the sector performance. The foreign exchange inflow in the ICT sector has been steadily growing since the year 2001 when there were no exports but jumped to US$2.9 million and currently estimates put exports from the sector at over US$10 million per annum. (Figure 2 )

Month Year Q1 Q2 Q3 Q4 Total

Computer + Information Services 01/02 0 0 0 0 0 Communications 3.54 2.39 1.35 2.41

9.69 Computer + Information Services 02/03 0 .65 1.03 1.20

2.88 Communications 2.44 2.93 3.34 2.83 11.54 Computer + Information Services 03/04 1.09 0.93 1.29 2.38 5.59 Communications 2.96 2.79 4.25 3.60

13.61 (Source: Balance of Payments Section, Research Department-Bank of Uganda)

Figure 2

2.1 Contribution to the GDP The ICT and transport sector are still computed together in terms of GDP contribution. Efforts are ongoing between Uganda Communication Commissions, Uganda Bureau of Statistics; and The Ministry of Finance and Economic Development regarding isolated specific contribution of the ICT sector to GDP while reporting. For the financial year 2006/07, the combined sector contribution to GDP was 9% up from 8.2% in the previous year. (Figure 3) However current figures show the ICT sector attracted more than US$350 million worth of investment since 2001 and generated revenues of UG shs 1.22 trillion within the same period. This represents a 4.2% growth contribution to GDP by the ICT sector for the period 2001-2005 (Figure 4) and an indication of the sector impact on the economy. This gives an average Annual Investment estimated of USD 70 M. (Figure 5). This figure excludes the capital investment by any new licensed service providers (after July 2006), which is estimated to be close to USD 70 million in the first year of role out. The increase in investment is a direct response to competition by the existing operators and introduction of new services.

Communication Sector Percentage Growth rate

38.9

50.4

31.2

33.3

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60

2003/04 2004/05 2005/06 2006/07

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Figure 3.Sector Contribution to GDP (Source. UCC Review of telecommunication sector August 2007)

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Figure 4.Contribution of the Communication sector to GDP

(Source Uganda Bureau of Statistics)

Figure 5:Investment in the Communication sector in (US$)2003 to 2006 (Source. UCC Review of telecommunication sector August 2007)

Transport & communications sector contribution to GDP 2006/07

6.37.2

8.29

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Communications Sector Investment

Telephony (Voice + Data) 43,096,869 77,603,802 48,850,424 72,321,439

Postal 1,000,231 883,972 1,009,069 1,178,254

2003 2004 2005 2006

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2.2 Revenues from the ICT Sector Using the Data obtained from audited financial and operational statements of service providers. The Postal and Communications Sector review report for the 2006/07 (August 2007) indicated an estimated revenue of USD 36O million. (Before adjusting for taxes, depreciation, cost of sales, operating and financing costs) This was derived from the volume sales of postal, telecommunication and data services, and represented an estimated increase of 20% from the previous year (2005/06.) It is noted that Industry profit (After all cost; taxes, dep., opex etc) is now estimated to be around USD 30 million. Figure 6

Figure 6 Turnover in ( US$ ) (Source. UCC Review of telecommunication sector August 2007)

2.3 Employment trends in sector The recent review of the Postal and Communication sector (August 2007) shows that, the sector employing more people indirectly as compared to direct or full time employment. (Figure 7) These range from payphone and airtime vendors, construction workers, ICT businesses etc. There are more than 200 micro/pico ICT firms employing 2-5 people that are engaged delivering ICT services. Indirect employment for the duration 2006/2007 is estimated close to 350,000 while direct employment is at 6,062. The level of employment is expected to increase with the newly licensed service providers.

Figure 7 (Source. UCC Review of telecommunication sector August 2007)

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100,000

200,000

300,000

400,000

Communication sector employment (2002 - 2006)

Direct 5,832 5,028 5,193 5,511 6,062

Indirect 116,640 175,980 233,685 286,572 343,886

2002 2003 2004 2005 2006

0

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200,000,000

300,000,000

400,000,000

Comunications Sector Turnover

Telephony (Voice + Data) 198,845,437 245,621,439 292,063,684 351,458,704

Postal 10,049,936 10,604,549 11,671,641 13,072,238

2003 2004 2005 2006

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3 Policy and Regulatory Frame works The current status of ICT in Uganda has been influenced by various policies, statutes, laws, acts and regulations, passed and enacted in the past ten years. These have brought about liberalization in various social / economic sectors leading to an impressive economic performance. The more relevant ones are briefly described below: 3.1 The Communications Act, 1997 The Telecommunications Policy was enacted in 1996. The main objective behind the policy was to increase the penetration and level of telecommunication services in the country through private sector investment rather than government intervention. This policy framework focused on the provision of infrastructure under minimum competition known as the Exclusivity (Duopoly) regime. This limited competition was a key strategy pillar in the policy to attract private sector investment at a time when the market size was assumed to be small. The objectives of the Exclusivity/Duopoly policy were to increase tele-density from 0.28 lines 2.0 lines per 100 people by 2002. They also included the need to improve telecommunications facilities and quality of service; serve the unmet customer demands; and to increase the geographical distribution and coverage of the services throughout the country. The target for meeting these objectives were to increase national network digitalisation to 75%; increase subscriber lines to at least 300,000 lines by 2002; install pay phones and other appropriate telecommunications services in rural areas; improve call average call rate from 35% to 65% and the percentage of fault recovery rate to 60% in 24 hours and 95% in 72 hours. The existence of a new and digitalised network has been the pillar to new spectrum utilisation and value addition consequently the emergence of new application and services like, Data Communication, Internet Services Internet based applications, more effective broadcasting (FM-radio) and Courier Services. In 2006 Uganda redefined its telecommunications policy environment. These subsequent pronouncements opened the telecommunications sector for full competition for both service and infrastructure provisioning. Consequently a new telecommunication market structure emerged in Uganda (Figure 8)

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Figure 8.Telecommunication market structure (Source UCC August 2007)

3.2 Rural Communications Development Policy, 2001 The main objective of the policy is to provide access to basic communication services within reasonable distance to all people in Uganda. 3.3 The Electronic Media Statute, 1996 The Statute created a licensing system, under the Broadcasting Council, for radio and television stations, cinemas, and videotape rental businesses. The purchase, use, and sale of television sets were also to be subject to licensing by the Council. The legal and regulatory frameworks provided by the Communications Act and the Electronic Media Statute addressed sectoral concerns to some extent. This necessitated the drafting of a comprehensive policy on ICT that takes into account the various sectors. The National ICT Policy was developed (2003) and has provided for the Electronic Transaction Bill , the Computer Crime Bill and The e-signature Bill. It is noted that other acts and laws like the Informational Access Act the Intellectual Property law are already in place to support the ICT sector

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4 Players in the ICT sector in Uganda There are two major players in this sector. The Government and the licensed operators, but with room for Public Private Partnership. The Government policy is to have an ICT industry that is private sector-driven, with the Government’s role being to create an enabling environment. Government’s involvement is primarily of:

? The Ministry of ICT for integration and coordination of the different ICT activities in both the public and private sectors and initiation and development of ICT Policy advice and strategy.

? Through the Uganda Law Reform Commission the Government sets an enabling legal framework.

? The Uganda Communications Commission, Uganda Broadcasting Council and Uganda Media Council, oversee the regulatory functions and promote development of the ICT communication (Telecommunications and Postal Services) National Information Technology Agency-Uganda (In Offering) Broadcasting Multimedia sector in the country including the rural areas. i.e. Regulation and Standards

? Uganda Investment Authority for promoting and facilitating investment opportunities in the sector as well as being the focal point for the ICT exports Strategic Intervention Program. i.e. Promotion and Facilitation

? The Uganda National Council of Science and Technology and Public Tertiary Institutions for innovation, research and development of ICT Policy advice and strategy. i.e. Research and Development

The private sector of any healthy national economy is the barometer of economic activity and potential. In an economy, where the private sector is the driving force, entrepreneurs and business people continuously promote new creative ideas. The end Exclusivity/Duopoly period July 2006 and the Ministerial pronouncements on services and infrastructure provision that opened the communication sector have seen new entrants sector. Currently there are two (2) National Telecom Operators (NTO) ,one (1) Cellular Operator four (4) Public Infrastructure Providers (PIP), four (4) Public Services Providers(PSP) Capacity resale only, ten (10) Public Services Providers - Voice and Data only, two(2) PSP - Voice and Data plus Capacity resale. Since January 2007 three(3) new PIP + PSP have been licensed additionally two(2) PSPs (Voice and Data + Capacity resale, three(3)Capacity Resale only and ten(10) PSP Voice and Data only. See Table 1

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Table 1: Some of listed operators in telecommunication industry: as of 2007 National Telecom Operator (NTO) 2 MTN & UTL

Cellular Telecom Operator (CTO) 1 Celtel

Public Infrastructure Providers (PIP) 4 MTN, UTL Afsat Communication (U) ltd

Public Service Providers (PSP)- Capacity Resale only 4 PSP- Voice and Data only 10 eg.Multi Choice & Infocom PSP- Voice and Data plus Capacity resale 2 Talk Telecom Solutions Limited &

Yo Uganda Limited PIP + PSP operators (New Operators)

? WARID Telecom Uganda, HiTs U Limited, InfoCom and Africa on Line

PSP (Voice and Data) + Capacity resale

? Satellite Communications network ? International Telecom Limited

Capacity Resale Only (New Operators)

? Talk Telecom Solutions Limited ? Roke Investment International ? Mo Telecom International Limited

PSP Voice and Data Only ? TMP(U)Ltd, ? I-Tel Ltd, ? Kampala Siti Cable Ltd, ? Nomad Com Ltd, ? Multi Choice, ? Link U Wireless, ? Bukasa Telecom, ? RCS Ltd, ? Kanodiko Systems Ltd, ? Anupum global soft Ltd,

? NB: All PIP Licensees also hold PSP licenses 5 Uganda’s ICT Success and Key Strengths Factors The success of this sector hinges largely on the good legal and regulatory frameworks as well as other policies like Privatization and Liberalization. The willingness of the Private sector desire to venture notwithstanding. The general trend in this sector has seen recognizable characteristics aimed at: ? Promoting access to ICT services by linking citizens locally, regionally and internationally. ? Providing strategic policies legal and regulatory environment geared at facilitating the digital age. ? Introducing ICT in schools at all levels as well as in the centres of higher learning. ? Using ICT to improve policy delivery efficiency, effectiveness and competitiveness of the

business sector. ? With the members of the ICT industry and business development service providers, to promote

the use of ICT as a business productivity tool. ? Creating jobs for the citizens. ? Creating wealth to the country

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5.1 Key Strengths of the ICT sector ? Geographical Location and time difference favouring BPO

Because of its has a convenient time zone location from the major consumers of ICT related services of -8 hours from USA and Canada, -3 hours from UK and +6 hours to Japan. These time zone differences provide a unique opportunity for Uganda to do business with Asia in the morning, and to transact with Europe and the Americas in the afternoon

? Latent local Market Potential Only 10% of Ugandans have access to phones and much less percentages have radios or computers let alone Internet.

? Liberalised ICT Market Due to the liberalised Policies pursued since the 1986, Uganda ICT Market is one of the most liberalised and best regulated with the region ? Cost of License is cheap Uganda has the cheapest ICT licensing and services regimes in Africa ? High Production rate of skilled labour force with good training background Each year Uganda’s Universities produces more than 10,000 graduates who can productively be engaged in ICT sector ? Fluent English speaking population ? Good quality infrastructure supportive of future investments ? Young population suitable for ICT work

Uganda has 54% of its population under the age of 14.This young population can be trained into a high quality ICT labour force.

6 Communication Infrastructures and Technology 6.1 ICT Penetration Uganda’s Universal Access indicators are clearly indicated in the nation wide coverage, non-discriminatory access and nationwide availability of telecommunications services. Therefore the communications infrastructure network put in place by the major communications services providers (MTN, Uganda Telecom, Celtel and others) today covers almost all the districts in the country. And to ensure good quality services delivery, more than 80% of all the Public Switching Telephone Network (PSTN) switching systems in the country are digital. Figure 8shows the National Network Distribution

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Figure 9 Networks Distribution Map There are optical fibre links connecting Kampala City to Entebbe and Jinja, which are the major centres of economic activities, with further expansions currently to link to Masaka and Mbarara to Uganda Rwanda boarder in the West and Busia (Uganda Kenya boarder) in the East as well as the other districts of the country are taking place.. There are fibre optic ring within Kampala therefore Metropolitan Wide Area Networks can be configured

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Uganda’s international gateways are today mainly satellite based but connection to the world optic fibre network at the India Ocean town of Mombasa/ Dar es Salaam or Red Sea Port Sudan are in offering. However no commissioning date fixed to this achievement yet.

There is an extensive use of microwave in the backbone infrastructure and Vsat Services. These national and regional transmission links are to a great extent digital. Before the Liberalization of the telecommunication trade in 1998 Uganda’s Tel-density has grown from the beyond the minimal sub-Saharan level of 2.8 to a combined fixed and mobile level of 8 in June 2006 to 13.3 in June 2007.This represents an annual growth rate of 68% or a net addition of 1.5 million customers within a period. a year. (Figure 10) The number of Personal computer per 1000 has risen to 2.5

Figure 10: Tele-density and telephone customers (Source UCC August 2007) By September 2006, the number of Internet subscribers, small though it was, increased to 13,000 from 6,500 in 2002. The number of people accessing Internet at least once in the month was estimated to be more than 2,000,000. This was attributed to the increase in Internet access points in the country In addition, Internet capacity increased; total bandwidth was estimated at 126 Mbps (31.7 up link and 94.3Mbps down link) However one of the most remarkable growths has been in Private FM Radio Stations and TV Stations. The number of FM Radio Stations has grown from 3 in 1996 to a staggering 156 in 2007 while the TV Stations have grown form 4 to 32 in the same period. The FM Radio Station and TV Stations growth have promoted and populised the local music. Therefore Ugandans consume more local music than ten years ago. Consequently the music industry has become a force with the regional. Uganda can now be considered a net export of music.

Number of telephony Customers and Teledensity

0

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Fixed 60995 71272 87513 108140 154383

Mobile 621082 987456 1315300 2008818 3575263

Teledensity 2.8 4.3 5.5 7.8 13.3

2002/03 2003/04 2004/05 2005/06 2006/07

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6.2 National Data Transmission Backbone Infrastructure (NBI) The Government of Uganda through the Ministry of Information Communication Technology in spearheading the development of the National Data Transmission Backbone Infrastructure (NBI) and the Electronic Government Infrastructure (EGI) The over US$ 100 million project is meant to complement the private sector initiatives to relieve the acute shortage of bandwidth and takes the form of public-private partnership with the ultimate benefits being to the consumer. It is planned that implementation will be in three phases which are similar but only differentiated by magnitude of scope in terms of geographical coverage. When completed the NBI will link all the districts of Uganda by 2010 The first phase will establish the NBI in three towns of Kampala, Jinja and Entebbe and the E-government that shall link ministries. The NBI is intended to ensure that high bandwidth data connection is available in all major towns of Uganda at reasonable rates. The EGI is designed to reduce the cost of doing business in government, improving communication between government agencies and reducing the need for officials to commute for meetings and thus increasing efficiency. 6.3 Technology Ugandan regulation policy advocates for technology neutral approach and currently, there are many networking elements in play in Uganda. Among them are: 1. Ethernet LANs connection to the fibre-optic ring 2. Leased data lines 3. ADSL/HDSL/ISDN 4. GSM/CDMA2000 5. Fixed Wireless data services 6. Wi-Fi 7. Frame Relay/ATM 8. Dial-Up data 9. POTS telephone service/ Voice over IP (VoIP) All of these technologies have associated benefits and drawbacks, which are being addressed not only for the general national communication requirements but to attract foreign investment and launch Uganda into the restrictive global markets including Business Process Outsourcing. 7. ICT Human Resource There is a fast growing ICT training drive with a number of computer training institutions and fully fledged ICT training institutions coming up each day. This ICT-related training in Uganda is noted to be of reasonably high quality. Uganda tertiary institutes graduate over 10,000 people per year in different disciplines ranging from high-tech to humanity studies. This gives Uganda a good pool of affordable skilled workforce with good and abundant English skills as well as a large resource of technically competent persons. It is estimated that there are about 2000 IT professionals in Uganda currently. With a recent spurt in IT/ICT degree, diploma and certificate programs offered by universities and other private training institutes, this number is expected to rise rapidly. Cisco has also been involved in Uganda through its programs directed towards Least Developed Countries. It has launched an e-learning initiative and has setup over 10 Cisco Academies in 2003 not just in Kampala but in few other districts in partnership with local academic institutions such as Makerere University, Uganda Martyrs’ University,

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Uganda Institute for Information and Communication Technology, Kyambogo University, Kampala International University, The Islamic University in Uganda (Mbale), Uganda Christian University (Mukono) and others Institutes. This relationship too could be harnessed and developed into an investment beyond the sphere of e-education. The ultimate is to have skilled operators of ICT Incubators, Call Centers and IT Parks with in the country. Most of these institutions have some form of placement support for their students. It may be noted here that the lack of experience of these Ugandan graduates makes it very difficult for the ICT industry to employ their skills immediately. As the number of graduates is rising there is increased concern if job growth will keep pace. However in an interview, the CEO of Telecos and Financial Institutions in Uganda (2003) shared the view that Ugandan students are eager to learn and with the right training become very efficient at their jobs. Therefore there is a good pool of skilled work force in the country 8. Traffic and Tariffs The most recent surveys reports (2007) show that Uganda’s domestic traffic grew was 37 % while International traffic (incoming and outgoing) increased by 58% close to 370 million minutes whereby the international incoming is 4 times more than out going traffic. Due to competition Uganda’s tariffs remain relatively comparative in the region. This has had stimulating effect on the ICT Sector market growth. There are more aggressive marketing, innovative services and pricing schemes that have seen drastic reduction in connection charges and rate call below the regional average of US$ 1.70. Figure 11 (i),11(ii) ,11(iii). All operators have removed subscription charges

Mobile to various destinations US $

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Figure 11 (i) Rate calls reduction tends due to competition (source UTL September 2007)

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Fixed to various destinations US $

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Figure 11 (i) Rate calls reduction due to competition (source UTL September 2007)

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3 min peak rate call toUS$

Fig. 11(iii). 3-minutes peak rate call to US $ (Source World Bank.) The Internet prices have started dropping and new pricing methods are being introduced in the market. These include capacity re-sale areas. However it must be noted that Internet prices still relatively high compared to regional and international markets

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9. Trends and Market Opportunities It is estimated that the Ugandan ICT market is growing at a cumulative annual growth rate (CAGR) of above 25%. The hardware market was estimated to have touched USD 63m in 2004 (up 23%) and the software market to USD 22m (up 27%). The fledgling ICT related services market is high but no reliable figures yet in placed. These services are mostly from the ICT training, website development and custom software development sectors. This upward trend is expected to continue as long as new players join the market; the present telecommunications and ISP companies substantially increase their penetration as well as upgrading their networks. Private businesses are as a group the most e-ready sector in the country. The private sector is investing at a steady rate in automation and capacity building. This is a steady source of investments in ICT that is likely to expand along with economic expansion. Other steady markets are the NGO and non-profit sector. International donor agencies are a major source of work for the ICT industry and the economy at large is still to a great extent dependent on foreign aid. The financial sector has recently begun expanding its automation and is also a major driver of the ICT market. Strides to make Ugandan society fully e-ready and allow the development of various technology services directed to local, regional and international/global have been made. These include investments in infrastructure high bandwidth fiber backbone, especially in fiber optic connectivity, between the larger towns and to submarine backhaul trunks. Below is a list of opportunities that have emerged out of current ICT status in Uganda.

? IT/ICT Technology Parks. These will boost the development of BPO Incubation and Innovation systems

? Business Process Outsourcing (BPO) Recent infrastructure development, Uganda geographical and time zones location as well as the big pool of skilled but cheap labour force favour investment in the outsourcing services

? Call Centre Services and Business Support. ? E-Commerce & M-Commerce Solutions and B2B solutions. There are few companies with

specialised / customerised E-Commerce M-Commerce solutions. ? Software Development and Training Opportunities ? Software Testing & Assurance ? Data Integration

Online Database Integration provides the facilities to single office to access other offices branches data spread across a territory from the same source.

? Data Warehousing and Data Management. Uganda natural location and gives it an edge in hosting data recovery centers

? Integrated Solutions Planning In demand-driven supply chain, it is a must to right product at the right place at the right time and at the right price. There must have inventory turns and avoid stock outs while meeting business goals and objectives. And it’s not enough to just react to the needs of customers and hope you have what they want— you must anticipate demand before it happens and plan for what is coming in.

? Hardware Equipment Assemble. There are no ICT manufacturing activities in the country. The best way enter this area is through assembling. A variety of resources to support equipment assemble are abundant in Uganda

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? Multimedia Development and Music. The Multimedia business is still in its infancy and whatever production made here is faced with stiff global and regional competition. More investment to exploit the local talents and innovation is needed.

? Internet Applications ? E-Translation Services

The local population cannot easily access many documents and information. Currently there is a need to electronically translate those documents into local content.

? Rural Communications ? Broadband Service Provision. ? Software Solutions for Financial Sector. ? ICT Business Incubation. ? Network Computing /Management software. ? Intranet Internet &Extranet Applications. ? Professional Solutions for Manufacturing Industry. ? IT Education and Training and setting up of ICT virtual zones.

10 POSTAL COURIER SERVICES 68 % of the Ugandan population lives in rural areas and post courier services are still an essential mode of information and services delivery. The postal business has expanded and new investments have been made to face the challenges due to development in technology as well as globalization. The national target is to have a postal access in any areas with more than 250 inhabitants. 10.1 Private Courier services. The need by customers for faster, more secure and efficient mean of goods distribution and delivery has become more demanding. Whereas substantial volumes of mails are delivered through the traditional postal systems, same-day or overnight door-to-door delivery services are expected. Private Licensed courier operators fill this gap. The license authorizes them to carry and convey articles by land .air and water within Uganda for local licensees and beyond for regional and international licensees. The said articles include time sensitive Business Documents and Data. Legal Documents, Financial and Accounting Information, Cancelled Cheques, Construction Plans, Specification Tenders, Samples, Shipping Documents Spare Parts Computer Tapes Advertising Data Small Parcel and Letters above 1kg 10.2 Coverage of Services The activities of the private couriers are mainly centred within and between the major urban centres, while Posta Uganda covers a much wider area of the country. Generally penetration rate is low Currently UPL has a network of 11 Regional Head Post Offices, 51 Departmental Post Offices, 255 Sub-Post Offices, over 1623 Stamp Vendors and 70,865 installed private post office boxes. While only a very small proportion (about 5%) of UPL mail is delivered to home or office addresses, the rest of the deliveries are made through private letterboxes located at Post Offices

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11 Special ICT sector incentives The Government of Uganda has recognized the potential of IT-enabled services and has taken positive steps by providing numerous incentives. In 2002 the government reduced and also waived taxes on computers and computer related equipment to encourage the growth of the ICT sector and its services. ICT companies do also benefit form the general incentive listed below. 11.1 Category 1- Initial Allowances The incentives covered in this category are capital allowances expenses which are deductible once from the Company's Income. Initial allowances on plant and machinery located in

Kampala. Entebbe, Namanve, Jinja & Njeru 50% Outside Kampala. Entebbe, Namanve & Jinja area 75% Start-up costs 25% Scientific Research expenditure 100% Training expenditure 100%

11.2 Category 2- Deductible Annual Allowances Depreciable Assets specified in 4 Classes (sixth schedule) under declining balance method

Class I Computers & Data handling equipment 40%

Class 2 Automobiles, Construction and Earth moving Equipment 35%

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Appendix 1 Key Contacts

Ministry of Information and Communication Technology 4th Floor NSSF House Jinja Road P.O.Box 8147 Kampala Uganda Tel. 256-414-236262 Fax: 256-414-231314 Website www.ict.go.ug

Uganda Export Promotion Board Conrad Plaza 5th Floor, Entebbe Rd. P. O. Box 5045, Kampala Uganda, Tel: +256-31-262590 / 262591 Website: www.ugandaexportsonline.com

Uganda Communications Commission 12th Floor, Communications House Plot 1 – Colville Street P. O. Box 7376 Kampala, Uganda E-mail: ucc@ucc.co.ug Tel: +256-31-2339000; +256-41-4339000 Fax: +256-41-4348832

Private Sector Foundation of Uganda Plot 43 Nakasero Road P.O. Box 7683 Kampala, Uganda Tel:+256 - 41 - 230956, 342163 Fax: +256 - 41 – 259109 E-mail: psfu@psfuganda.org Website: www.psfuganda.org

Uganda Investment Authority P.O. Box 7418 Kampala, Uganda Tel. +256-414-301000 Fax +256- 414-342903 E-mail: info@ugandainvest.com Url. www.ugandainvest.com

Uganda National Chamber of Commerce &Industry Plot 2, Parliament Avenue First Floor, Jumbo Plaza Box 3809 Kampala Tel: 256 41 503 024/36 Fax: 256 41 503 036 Email: info@ugandachamber.com

Uganda Manufacturers Association (UMA) Lugogo Show Grounds P.O. Box 6966 Kampala Tel: +256 41 220831/221034/287615/2 Fax: +256 41 220285 E-Mail: information@uma.co.ug Website: www.uma.co.ug

. Uganda Broadcasting Council Pilkington Road Workers’ House Floor

Uganda Registration Services Bureau (URSB) Plot No. 5 George Street, 4th Floor, Amamu House General:+256 – 41 – 235915/233219 Fax:+256 – 41 – 250712 Official Receiver: 256 – 41 -345727 P.O.Box 6848, Kampala

Uganda National Bureau of Standards Plot M217 Nakawa Industrial Area P.O.Box 6329 Kampala Tel.: +256-41-505995 Fax: +256-41-286123 Email: unbs@infocom.co.ug Website: www.unbs.go.ug

5. Uganda Revenue Authority Headquarters: Nakawa Industrial Area, Postal Address: P.O.Box 7279, Kampala Uganda, General Lines: +256-41-334000/1 –10 Email: prte@ura.go.ug Website: www.ugarevenue.com

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Appendix 2

TELECOMMUNICATIONS LICENSING APPLICATION GUIDELINES

LICENCE CATEGORIES OF SERVICES APPLICATION REQUIREMENTS

LICENCE FEES (VAT

EXCLUSIVE)

Public Service Provider Licence (PSP) N.B: Applicants for the Public Service Provider Licence can choose any one of the two Categories or all of them, BUT the applicant must fulfil the specific requirements of each category.

PSP Category 1: Public Voice and Data, e.g., ? Cellular service

(Mobile Virtual Network Operators- MVNO),

? Fixed voice

service, ? Global mobile

personal communications by satellite (GMPCS) services,

? Internet access

(including IP telephony + Virtual Private Networks),

? Internet

exchange services (IXPs for Corporate companies, e.g., Banks),

? Virtual Private

Networks (VPNs) that are NOT provided over the Internet,

? etc

An application accompanied by the following separated/stand alone annexes: Company Profile: to include ? Nature and structure of the applicant (a

subsidiary, associated companies, joint ventures, etc) ? Certified copy of the Certificate of

Incorporation of the company in Uganda ? Certified copy of the Certificate of

registration (if not incorporated in Uganda) ? Certified copy of the Memorandum and

Articles of Association. ? Business Plan: to include ? Business concept (business and

service/product description, customer and geographical coverage etc) ? Economic, market and financial analysis

(with proposed initial prices and cash flow statement), ? Evidence of capital (bank deposits, credit

facilities and audited accounts1) ? Operations arrangements (human

resource plan, customer service plan, support arrangements)

? Technical Application: to include ? service technology, ? illustrated network description with

capacities and facilities/infrastructure to be leased from licensed providers, ? essential resource/facilities

requirements, ? interconnection interface

arrangements/requirements ? Quality of Service levels and equipment

standards. NB: 1. Any provider wishing to utilize Prepaid services will be required to indicate measures put in place to protect consumers of the prepaid services.

? Application

Processing: US $2,500.

? Annual

Licence Fee: US $10,000.

? Annual

Levy: 1% of Gross Annual Revenue from Licensed services

1 For a creditworthiness (from bank or established financial institution

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PSP Category 2: Capacity Resale, e.g., ? Capacity

Resale services (local and international),

? Calling Cards, ? etc

An application accompanied by the following separated/stand alone annexes: ? Company Profile: to include ? Certified copy of the Certificate of

Incorporation of the company in Uganda ? Certified copy of the Memorandum of

Association. ? Business Plan: to include ? Business concept (business and

service/product description, customer and geographical coverage etc) ? Economic, market and financial analysis

(with proposed initial prices and cash flow statement), ? Evidence of capital (bank deposits, credit

facilities and audited accounts) ? Operations arrangements (human

resource plan, customer service plan, support arrangements)

? Technical Application: to include ? service technology, ? illustrated network description with

facilities/infrastructure to be leased from licensed providers, ? essential facilities requirements, ? any interconnection interface

arrangements/requirements ? Quality of Service levels and equipment

standards. NB: 1. Any provider wishing to utilize Prepaid services will be required to indicate measures put in place to protect consumers of the prepaid services.

? Application

Processing: US $ 2,500

? Annual

Licence Fee: US $ 3,000

? Annual

Levy: 1% of Gross Annual Revenue from Licensed services

Class 1: Public Pay Communication Services (e.g., Internet Café, Payphones, telephone bureaus etc)

All are encouraged to register by submit notification together with ? Copy of Trading Licensing ? Indication of area/location of Operations ? Services being provided NB. Any provider wishing to provide Prepaid services shall have to first apply for individual licences (Public service provider) and shall to indicate measures put in place to protect consumers of the prepaid services.

? Application Processing: N/A

? Annual

Licence Fee: NIL

? Annual

Levy: NIL

General Authorisation

Class 2: Private Network* Services

No application requirements except in the case where there is need to use the Essential Facilities, like Spectrum and the Numbering resource. In this case, they shall have to apply for AUTHORISATION to use these facilities.

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Infrastructur

Public Infrastructure Provider

An application should indicate the following: ? name of applicant (company), ? business address, ? contact telephone number, ? facsimile number, ? email address ? as well as website address/URL where

available. The name and designation of contact person within applicant’s organisation should also be included. The above should be accompanied by the following separately bound/stand alone annexes: ? Company Profile: to include ? Nature and structure of the applicant (a

subsidiary, associated companies, joint ventures, etc) ? Certified copy of the Certificate of

Incorporation of the company in Uganda ? Certified copy of the Certificate of

registration (if not incorporated in Uganda) ? Certified copy of the Memorandum and

Articles of Association. ? Business Plan: to include ? Business concept (business description,

target customer and geographical coverage etc) ? Economic, market and financial analysis

(with proposed initial prices and five year cash flow statements), ? Evidence of capital and proposed

financing structure (bank deposits, credit facilities and audited accountsError!

Bookmark not defined.) ? Operations arrangements (human

resource plan, customer service plan, support arrangements)

? Technical Application: to include ? Detailed description of planned

infrastructure facilities, indicating technology to be used, capacities to be installed (in switching and transmission facilities) and illustrated with network diagram ? Facilities/infrastructure sharing

initiatives taken or planned leasing from other licensed providers, ? Roll out plan ? Essential resource/facilities requirements

, ? Interconnection interface

arrangements/requirements ? Disaster recovery plan ? Demonstration of technical experience

and capability as well as access to technical expertise and experience

NB: Successful applicants shall be required to submit letters of credit in favour of UCC to the value of US $25,000.

? Application

Processing: US $2,500.

? One time

initial fee: US $100,0003,

4 ? Annual

Licence Fee: US $10,000

? Annual

Levy: 1% of Gross Annual Revenue from Licensed services

2 The 13th October 2006 Ministerial Guidelines define infrastructure as being “Plant, equipment and systems associated with transmission, reception and switching of telecommunications (electronic) signals” 3 There may be a separate entry fee payable to Government for holders of both a service licence and an infrastructure licence. 4 Applicants intending to use wireless infrastructure exclusively in the ISM (Industrial, Scientific and Medical) bands (2.4GHz and 5.8GHz) instead pay US $2,000 as their one time entry fee and are exempted from paying annual licence fees

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Private Network* Infrastructure

No application requirements except in the case where there is need to use the Essential Facilities, like Spectrum and the Numbering resource. In this case, they shall have to apply for AUTHORISATION to use these facilities.

*A private network is one established and operated based on the following:

? For the sole use of members of the owning body/entity in a private closed user group,

? Established within property boundaries, only extending into public domain to link up geographically separated branches owned, leased or rented by the entity and only upon receipt of the necessary permission from the respective public authorities,

? Telecommunication services on the network not offered for monetary gain Established, operated and maintained