By Ben Musanje
The Uganda Communications Commission (UCC) has moved to restrict the importation of telecommunications equipment by unlicensed Wi-Fi hotspot operators in collaboration with the Uganda Revenue Authority (URA), following revelations that illegal internet reselling costs the government an estimated Sh148 billion annually in lost tax revenue.
UCC Executive Director George William Nyombi Thembo said the Commission was working with URA to ensure that telecommunications equipment is imported only by licensed operators as part of measures to curb the growing practice of purchasing internet services and reselling them to the public without authorization.
Thembo announced the planned intervention on Tuesday, during a joint press conference with telecommunications industry stakeholders at UCC House in Bugolobi, Kampala.
“We are agreeing that these can only be imported by licensed operators,” Thembo said, explaining that telecommunications equipment requires specific regulatory controls because of the nature of the services it supports.
The move targets an estimated 4,000 unlicensed public Wi-Fi hotspot operators that UCC says are operating across Uganda, with their numbers increasing daily.
The operators typically purchase high-speed internet connections, including fibre-to-the-home broadband and fixed wireless access services, from licensed telecommunications companies before redistributing and selling the connectivity to individual customers.
According to Thembo, the practice allows the resellers to collect money from consumers without meeting the same tax, licensing and regulatory obligations imposed on authorised telecommunications service providers.
UCC estimates that the activity deprives the government of approximately Sh148 billion annually in tax revenue, with the losses continuing to rise as more operators enter the market.
“This activity is estimated to have caused an annual loss of government tax revenue of about Sh148 billion, and this value continues to surge,” Thembo said.
The Commission argues that the resellers gain a price advantage by operating outside the formal regulatory framework, while licensed operators must invest in infrastructure, pay taxes and meet their statutory obligations.
Thembo said licensed telecommunications providers charge an average retail price of about Shs2,000 per gigabyte, inclusive of taxes and other costs, while unlicensed hotspot operators commonly sell internet access at approximately Shs1,000.
He said the government could not continue allowing businesses to provide public telecommunications services without authorization, particularly when the practice affects revenue needed to support public services and undermines companies that comply with the law.
The proposed import restrictions form part of a broader enforcement campaign targeting unlicensed Wi-Fi hotspots. UCC has also announced plans for a nationwide operation to identify illegal installations, dismantle them and seize routers and related equipment.
The Commission has given hotspot operators seven days to voluntarily remove their installations before enforcement begins in earnest. Equipment seized during the operation could be destroyed after the regulator obtains the necessary court approval.
UCC says the crackdown is also intended to address concerns over consumer protection, network interference, infrastructure safety and national security.
Thembo said users of unlicensed hotspots often lack access to established complaint mechanisms and adequate protection when services fail or their personal information is misused.
He further warned that some operators install routers on electricity poles and infrastructure belonging to other telecommunications companies without the necessary approvals, creating safety risks and interfering with maintenance activities.
The Commission also maintains that unlicensed hotspots operate outside established subscriber registration and lawful interception frameworks, making it difficult to trace users when incidents occur.
The import restrictions are intended to complement these enforcement measures by limiting the availability of equipment used to establish unauthorised public Wi-Fi networks.
URA officials led by Solomon Musoke the Acting Assistant Commissioner Large Tax Payers Office attended the press conference alongside representatives of mobile network operators, internet service providers, police and national security institutions. However, the announcement did not specify when the proposed import controls would take effect or detail the precise implementation procedures.
UCC also warned customers that internet connections provided through unlicensed hotspots could be disrupted as telecommunications operators improve their ability to identify connections being used for resale. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
