SHS 148B TAX LOSS: UCC Targets 4,000 Unlicensed Wi-Fi Resellers as MTN Speaks Out

A major regulatory storm is brewing across Uganda’s telecommunications sector as the Uganda Communications Commission (UCC) prepares sweeping enforcement actions against approximately 4,000 unlicensed public Wi-Fi resellers, citing an estimated Shs 148 billion in annual tax revenue losses and severe infrastructure safety risks.

Speaking on the commission’s compliance assessment, UCC Executive Director George William Nyombi Thembo declared that reselling internet bandwidth without regulatory authorization constitutes an economic crime that destabilizes the market and shortchanges national revenue collection.

Thembo emphasized that these operators are not providing affordable internet, but are instead committing an economic crime that deprives the state of taxes and creates an unfair playing field for licensed telecommunications companies.

According to UCC market evaluations, licensed Internet Service Providers (ISPs) charge consumers an average of Shs 2,000 per gigabyte, a figure that factors in excise duties, value-added tax (VAT), subscriber registration systems, and capital investments in infrastructure.

In contrast, unauthorized resellers purchase wholesale high-speed connections from major ISPs and split the bandwidth, retailing data to the public at around Shs 1,000 per gigabyte through localized Wi-Fi hotspots without paying taxes or obtaining public provider licenses.

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To curb the proliferation of black-market internet distribution, UCC is coordinating joint operations with the Uganda Revenue Authority (URA) to target the illegal importation of unapproved telecom equipment.

The regulator warned that enforcement will include identifying illegal equipment mounted on utility poles, seizing unauthorized routers, and shutting down non-compliant access points.

Security, Data Privacy, and Utility Hazards

Beyond the multi-billion-shilling tax leakage, the regulator raised alarm over serious public safety, cybersecurity, and national security vulnerabilities:

 Utility Pole Hazards: Unlicensed operators frequently mount routers and cabling on electricity distribution poles (UEDCL/Umeme) and telecom towers without permission, exposing field technicians to electrocution risks and disrupting fiber maintenance.

 Cybersecurity & Data Privacy: Consumers using unverified public Wi-Fi hotspots lack data privacy guarantees, leaving their personal information, banking credentials, and social media accounts vulnerable to interception without avenues for legal redress.

 Lawful Interception Deficits: Unauthorized hotspots operate outside established SIM-card and subscriber-registration frameworks, frustrating police investigations when cybercrimes or coordinated illicit activities are carried out over their networks.

MTN Chief Speaks Out on Data Pricing vs. Network Sustainability

Reacting to the ongoing debate over data affordability versus regulatory compliance, MTN Uganda Chief Executive Officer Sylvia Mulinge urged for a balanced, sustainable model for lowering data costs.

While acknowledging public pressure for cheaper internet—driven by surging usage on platforms like TikTok, Instagram, and WhatsApp—Mulinge cautioned that artificial or predatory price slashes threaten the massive capital investment required to build and maintain 4G and 5G network coverage.

Mulinge explained that price reductions must be done in a manner that is sustainable, noting that telecommunications companies are held to very high accountability in terms of quality of service measured by the Commission, meaning the production side and consumption side must balance.

Mulinge affirmed that while MTN remains committed to exploring market-driven price reductions for Ugandan consumers, cutting prices below network maintenance costs would ultimately degrade service quality and paralyze infrastructure expansions into rural sub-regions.