 | Issue: | Africa and the Middle East I 2003 |
| Article no.: | 2 | |
| Topic: | Digital Inclusion for Small Business – Building a Country from the Bottom Up | |
| Author: | Patrick Masambu | |
| Title: | Chief Executive | |
| Organisation: | Uganda Communications Commission | |
| PDF size: | 64KB |
About author
Mr Patrick Masambu is the Chief Executive of the Uganda Communications Commission, the regulatory authority for communications in Uganda. Prior to his current appointment in January 2000, Mr Masambu worked for two years as Managing Director of Uganda Telecom Limited (UTL), the major fixed telecommunications services provider in Uganda. His other responsibilities have included Board Member, Regional African Satellite Organisation (RASCOM) and Chairman of CCCA, Commonwealth Telecommunications Council. He is currently a Member of the Board, Uganda National Council for Science and Technology, Chairman of National Advisory ACACIA Committee for Uganda and was elected Vice Chairman, ITU Special Study Group, IMT-2000 and Beyond in October 2000. Mr Masambu holds a BSc(Hons)(Engineering) degree and an MBA.
Article abstract
Uganda has taken a novel approach to the dissemination and universalisation of telecommunications services. In areas where the general population has little access to telecommunications services, such access is provided by small and medium-sized businesses. A special fund administered by the Uganda Communications Commission provides subsidies to small service providers such as Internet cafés and even to individuals that provide pay-phone service. Similarly, the government has also stimulated local SMEs to provide ICT training and to develop local content.
Full Article
In countries all over the world, administrations and other stakeholders are jointly striving through public – private partnerships to bring communication services closer to the user. In many of these places where services are not very developed, the last mile to the user is provided by small and medium-sized businesses. This article takes a look at this segment of the communication sector in Uganda. Reforms in Uganda’s communications sector can be traced back to the early 1990s when the process of liberalisation began. In 1996, the Government of Uganda pronounced that its major telecommunications policy objective was to increase the penetration and the level of telecommunication services in the country through private sector investment. While developing the telecommunications policy, the government took special recognition of the rural areas. The Uganda Communications Act of 1997 that ensued from this reform process therefore provided for a special fund known as the Rural Communications Development Fund (RCDF). This was to be established and administered by the Uganda Communications Commission. The objectives of the Fund are: to ensure that all sub-counties with at least 5,000 people have access to basic communication services by 2005 support establishment of an Internet point of presence (PoP) in every district of Uganda where each PoP shall be associated with at least one Internet café support the introduction of ICT use in at least one “vanguard” institution in every district of Uganda by 2004 promote provision of communication services in rural areas as a profitable business. As the UCC cannot itself be an operator, this programme is being implemented through existing operators and other interested private investors or business people. Except for UCC pilot projects, all other applications from interested investors will be in response to UCC’s public invitation for private service providers to bid for minimum subsidies to extend basic communications services in the underserved areas. This has a major bearing in supporting the growth of small businesses as described below: PoPs will help reduce the access costs thereby enabling small businesses to provide Internet surfing services at lower costs due to cheaper access means. It also increases the options available to them for connection to the ISP of their choice and thereby increases their flexibility in adopting new services like video conferencing and other multi media services through increased bandwidth Internet café subsidies assist various small entrepreneurs to start their businesses particularly in areas where such services do not currently exist Public pay phones are being developed in two forms: The first form is the standard type pay phone that is installed by the network operators. The second form is that in which a person sets up a phone kiosk or phoning point. Even with the establishment of the first kind, smaller businesses are encouraged since someone does have to sell the phone cards to users close to the facilities. This creates a viable business case to many Ugandans ICT training is also being carried out through local small businesses and this is expected to increase the general appreciation of the people for services such as Internet The content programme is aimed at making services such as the Internet more relevant to the people of Uganda. This would result in a boost to the Internet café businesses and, to some extent, the other information and communication technologies services Developing the various forms of communication, as well as increasing awareness and access to the services, is envisaged to boost the economy and social conditions of the people of Uganda. This is because the various other sectors would be boosted as illustrated in the following examples: “As the UCC cannot itself be an operator, this programme is being implemented through existing operators and other interested private investors or business people. Except for UCC pilot projects, all other applications from interested investors will be in response to UCC’s public invitation for private service providers to bid for minimum subsidies to extend basic communications services in the underserved areas.” The agricultural sector would have better dissemination of information to farmers thereby improving the general agricultural output while farmers would also get a better deal for their produce due to knowledge of market prices in other areas In the case of education, more information sharing between educational institutions in the country and access to a wider source of knowledge would go a long way towards improving the level of education and the general skills available in the country The health sector would have a better chance of introducing additional health techniques, such as telemedicine, thereby improving the general level of health services in the country. This would also provide an avenue for the Ministry of Health to disseminate health warnings and advice to the people In August 2002, the Uganda Communications Commission (UCC) waived the licence fees for operators of what are categorised as public pay communication network services in a bid to encourage growth of the payphone and cyber café industry. This category encompasses a range of service providers from an operator with one pay phone (in many cases, a mobile phone terminal) to cafes with as many as eighteen computers and, say, three payphones in the premises. Due to the resulting ease of establishing this kind of business, many semi-skilled and skilled small entrepreneurs, indeed, have joined this now highly competitive field. “With digital systems that have been introduced, both the customer and the service provider are able to clearly monitor the duration of the call while in process. However, many of the systems on the market do not have a facility for the service provider to distinguish between the cost of calls to different networks, which in many cases is disadvantageous to the less skilled service providers.” From the varying level of literacy among the entrepreneurs, a number of critical aspects have become apparent in this area of business: Even the most basic of business management skills are critical in the successful operation of such an establishment. Skills such as bookkeeping, money flow control have had tremendous effects on the outcome of the business Equipment needs to be as simple and user friendly as possible to accommodate the less skilled set of business people. This is essential when dealing with issues such as determining when to start billing a call and recording the time that the call lasted. With digital systems that have been introduced, both the customer and the service provider are able to clearly monitor the duration of the call while in process. However, many of the systems on the market do not have a facility for the service provider to distinguish between the cost of calls to different networks, which in many cases is disadvantageous to the less skilled service providers The skills currently required in the operation of cyber café business are higher. Some of the concepts that need to be understood in this environment include bandwidth management, access methods and how a connection is established. More information such as bandwidth usage reports made available in a simple to use form would certainly provide a lot of ease The generally low literacy level has also hindered the embracing of services such as SMS (short messaging), which would attract a certain category of customers and thereby introduce another market for the businesses. The availability of user-friendly technologies like touch screen terminals would go a long way in making services such as Internet applicable and useable to yet a wider base of customers. Evidently, digitalisation has brought a lot of ease to the operation of small businesses in the ICT industry. However, the addition of broadband holds promise in terms of more integration of services and a hope for a decrease in costs involved in operation of ICT in small businesses.
