Graphic Business News

Fight over Shs44 trillion mobile money in Uganda

By: Graphic Business
MTN Uganda says it controls 11.2 million subscribers in the telecom market share in Uganda.
MTN Uganda says it controls 11.2 million subscribers in the telecom market share in Uganda.

A fight is raging between telecom operators on one side, and the Uganda Communications Commissions (UCC), the Uganda Police Force and State House, over moves to monitor the Shs44 trillion mobile money businesses.

At the heart of the fight is a push by President Yoweri Museveni to get full access of the telecom data systems through the multi-billion technology called Intelligence Network Monitoring System (INMS) that the government put in place last year.

While Uganda has multiple telecom companies, the fight to defend business secrecy appears to have been left to the two telecom giants. These telecoms are MTN Uganda, which says it controls 55 per cent of the telecom market share or about 11.2 million subscribers, and its main challenger, Airtel Uganda.

Although Museveni acquired the INMS to monitor mainly the data and voice operations of the telecoms, the current disagreements appear to stem from the push by government departments to pry into mobile money, which is the biggest cash cow of the telecoms. Mobile money, which has been growing very fast, had a value of Shs44 trillion at the end of 2016. That is what the Uganda Police, State House and the Ministry of ICT want to get involved in.

Since telecoms started operating, they have been doing what is called self-declaration to the sector regulator, UCC. But with the entry of mobile money which requires financial sector regulation, and the advent of cyber security and terrorism which implies roles for security agencies, several control wars have erupted.

At the centre of the fight are the telecom operators, the Inspector General of Police Gen. Kale Kayihura, President Museveni's son, Maj. Gen. Muhoozi Kainerugaba, who also doubles as the Presidential Advisor on Special Operations, ICT Minister Frank Tumwebaze and sector regulator, UCC’s Boss Godfrey Mutabazi.

The fight is an escalation of incidents from as early as November last year when the UCC directed that telecoms grant the Uganda Police access to their mobile money operations data. The telecoms protested.

In a letter dated November 13, for instance, Airtel Uganda noted that from section 5(1) (u) of the UCC Act, the obligation and function to establish an INMS lay exclusively with the UCC and not the Uganda Police or any other department/agency of the Government of Uganda.

"We are not aware of any amendment to this provision or any other law or regulation that provides for INMS for Uganda Police," notes V.G Somasekhar, the Airtel Executive Director, in a letter to the UCC.

Apart from that, Airtel noted, the mobile money services was regulated by the Bank of Uganda under a different law, and as such did not fall within the category of services that should be monitored by UCC through the INMS pursuant to section 5(1) (u) of the Uganda Communications Act, 2013.