As Uganda Finds Out, Demanding National Broadband Costs Money In Reduced MTN Fees

Entirely so, of course we’d just love to have complete and clear national coverage for voice and mobile internet. Even, for broadband over mobile. Just as we’d entirely love to power the place on unicorn emissions and have candy floss for tea every single day. The thing is it’s not possible to have all we want. Other than the non-existence of unicorns everything has a cost to it. Like, having reliable, clear, national – even in remote rural areas – telecoms coverage costs money.

Someone, somewhere, is going to have to pay for coverage. And by the very nature of the claim, non-commercial coverage is going to have to be paid for by the taxpayers. Which is just what Uganda and its President Museveni are just finding out. It’s possible to disguise how the taxpayers have to pay for it of course, but the basic fact is still going to be there:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Kampala. President Museveni tasked the Uganda Communications Commission (UCC) to explain why they reduced the fees for renewal of MTN Uganda’s licence to far less than the originally proposed amount and noted that the reduction was unjustified.[/perfectpullquote]

Hmm, well, why then?

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] The minister for information, communication, technology and national guidance, in a letter in response dated Dec. 14, said UCC had decided to cut MTN’s fee to $58 million from $100 million after MTN said it would need to invest about $200 million to meet the conditions of a new national broadband policy. The policy compels telecom operators to invest in infrastructure to guarantee high quality voice calls and high data speeds across the country, including in rural areas where returns are low, the minister said in the letter seen by Reuters. [/perfectpullquote]

Note again that we are, at the start, already claiming that the high quality rural coverage is uneconomic. Heck, much richer nations like the UK and US don’t demand it on the grounds that it’s simply uneconomic. The value of it being there is less than the cost of providing it even when assuming all the more nebulous social values. And the revenue from providing the infrastructure is definitely less than the cost of doing so.

Taxpayers could cough up to subsidise that greater infrastructure. Taxpayers could gain less revenue from the MTN telecoms company for the lease of spectrum. But as high quality rural networks cost uneconomic amounts of money to provide then the taxpayers are going to end up paying for those rural networks come what may.

And nothing that President Museveni says about it is going to change that simple fact. You want that better network? You’re going to be able to charge less for the spectrum.