Uganda: Telecoms Take the Heat as Power Dwindles

For a while, it has mainly been darkness in homes and halved production capacity in factories: but now the nightmarish impact of the ongoing power shortages is inching troublingly closer to, perhaps, the most sensitive of all areas; communication tariffs.

In interviews with officials from all the three telecommunications companies last week, the real depth of the impact of the power crunch emerged; exposing, for the first time in several months, the havoc being wrecked on the companies’ operations and the array of solutions they are currently mulling to ride the storm.

..If the electricity shortages finally push the telecom tariffs up, the consequences for the wider economy, already deeply battered, might be catastrophic.

Just last week, the Uganda Bureau of Statistics reported that the median annual headline inflation for the year ending March had spiked to 7 percent, from the previous year’s 5 percent.

Costs of communication affect virtually every bit of the economy and even a slight adjustment usually reverberates across the board: a substantial increase this time thus could potentially send inflation flying into the double-digit rates. Thousands of customers might also be rendered unable to afford mobile phone services, terminating their subscription and disrupting the revenue streams of the telecom companies.

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