Limited access to electricity is severely hampering Uganda’s telecom sector, leaving hundreds of installed towers idle and costing operators millions of dollars annually, according to a recent report by the Uganda Communications Commission (UCC). The Annual Communications Sector Report 2024, released this week, revealed that at least 780 telecom towers across the country are not operational due to power shortages, forcing service providers to rely on expensive alternatives to maintain network coverage.
The UCC’s findings show that the nation’s low electrification rate is a major challenge for the sector. Only about 25 per cent of Uganda is connected to the national hydroelectric grid, meaning telecom operators must spend heavily on diesel generators, solar systems, and other backup power solutions. The commission noted that equipping a single telecom site with transformers, generators, and auxiliary power systems can cost between $60,000 and $270,000, depending on location and infrastructure needs.
The financial burden is significant, with the report estimating that providers spend over $60 million annually just to power their networks. The situation contrasts sharply with neighboring Kenya, where about 76 per cent of the population has electricity access. Kenya’s widespread grid coverage has helped boost mobile penetration to 64 per cent, while Uganda’s mobile usage remains at only 32 per cent.
In addition to power constraints, the report highlighted taxation and regulatory fees as major obstacles to digital expansion. A 35 per cent import duty on galvanized steel—a key component for constructing telecom towers—is a heavy cost for operators, especially since the material is not produced locally. The UCC noted that these taxes are often passed on to consumers, pushing up the cost of mobile and internet services across the country.
Environmental and regulatory compliance costs also weigh heavily on operators. Telecom companies must pay upfront fees to install infrastructure in protected or sensitive areas. For instance, five years’ rent is required in certain locations, alongside $20,000 fees to the Uganda Wildlife Authority and $15,000 to the National Environment Management Authority. While these payments support environmental protection, the UCC warned that they push total site costs to approximately $175,000, making it difficult for providers to justify expansion in rural or low-population regions.
Geography and logistics further complicate network expansion. Poor road infrastructure, hilly terrain, and remote locations slow the construction of towers outside major urban areas. As a result, telecom infrastructure remains concentrated in cities, with the Central region—including Kampala and Wakiso—hosting 44 per cent of all towers in Uganda. This urban focus leaves rural communities underserved, contributing to a growing digital divide between urban and rural populations.
The UCC report underscores the need for comprehensive reforms to boost Uganda’s digital infrastructure. It recommends improved access to reliable electricity, reductions in import duties for critical materials, and streamlined regulatory processes to encourage investment. Without these measures, the commission warns, the gap in mobile and internet connectivity between urban and rural areas is likely to widen, leaving millions of Ugandans without adequate access to essential digital services.
Telecom industry leaders and technology experts have called for government action, noting that investment in infrastructure is crucial for economic growth, financial inclusion, and digital innovation. According to the report, enabling more affordable and reliable network expansion would benefit not only service providers but also businesses, students, and households across the country.
As Uganda prepares to expand its digital economy, the UCC emphasizes that overcoming the combined challenges of power access, taxation, regulatory fees, and logistics is essential for ensuring that all citizens can benefit from mobile technology and internet services. Stakeholders say that collaborative action between the government, regulators, and telecom operators could unlock the sector’s full potential, bridging the rural-urban digital gap and fostering nationwide connectivity.
