KAMPALA Uganda (UGNEWSLINE) – Uganda’s appetite for connectivity is growing fast, and beneath it a parallel market has emerged. Unauthorised public Wi-Fi operators are buying business fibre and fixed wireless subscriptions and resell the capacity to the public, often as unlimited packages at competitive prices.
Consumers gain another way to get online, but licensed operators are feeling the strain.
The commercial impact is already visible
MTN Uganda’s results for the nine months to September 2026 show the commercial pressure. Data revenue grew by 12.8% to Ush 860.6 billion, but growth slowed to 7.8% in the third quarter, down from 17.5% in the second.
Yet demand for connectivity remained strong. Data traffic rose by 31.9%, average data usage per subscriber increased by 15.4% and home broadband registrations grew by 58.9%.
This suggests that the challenge is not a lack of demand, but how that demand is being monetised. Unauthorised resellers are using connectivity bought from licensed operators to compete for the same customers, often selling below the cost of providing the service and undercutting legitimate providers.
This not only affects operators’ revenues but also raises concerns about tax revenues being lost through activity outside the formal regulatory framework.
The question of fair competition
Competition works only when the same rules apply to everyone. Licensed operators invest heavily in infrastructure while meeting licensing requirements, quality-of-service standards and applicable taxes and levies. Where businesses resell connectivity commercially without the necessary authorisations, it is fair to ask whether they carry the same obligations. The concern is not affordable internet or alternative connectivity models, but that competition should take place in a transparent and accountable market.
Beyond telecoms: is Uganda losing tax revenue?
Commercial internet resale outside the licensing, reporting and tax framework could create compliance gaps and potentially cost government revenue. For a country working to strengthen domestic revenue and finance its digital transformation, that matters.
Government has signalled that it shares the concern. Speaking in Parliament on 27 October 2026, the Minister of ICT and National Guidance, Hon. Justine Kasule Lumumba, said: “We cannot continue losing revenue through illegal activities by people who have not followed the proper procedures to sell internet services. We shall not sit back and allow this criminality to continue when we know where it is happening.”
Who pays for the infrastructure powering Uganda’s digital economy?
In the first nine months of 2026, MTN Uganda invested Ush 397.7 billion in capital expenditure excluding leases, up 32.6% year-on-year. It deployed 255 new network sites, extended its fibre footprint to more than 40,000 kilometres and raised 4G population coverage to 94%, with 5G at 25.6%. That investment is sustainable only if those financing and maintaining the infrastructure can earn the returns to keep expanding it.
A regulatory response and the road ahead
The Uganda Communications Commission’s enforcement against unauthorised public Wi-Fi operations, which began in October 2026, is an important step. What must follow is consistent enforcement, clearer rules on commercial internet resale and proper oversight, so that consumers are protected and competition stays responsible.
The Minister has also stressed that enforcement must go hand in hand with affordability and investment.
“We have the law, and we should look at what we can do through the committee of Parliament to address the cost of internet,” Lumumba told Parliament. “We should consider both the Government and the private sector in transforming digitalisation in the country.”
The question is not whether Uganda should have more providers or more affordable connectivity. It should. The real question is whether the market can grow without disadvantaging those who invest, comply and contribute to the tax base. Uganda’s digital future depends not only on how many people can get online, but on whether the ecosystem behind that access is fair, accountable and sustainable.
