26 October 2011

Uganda: NBI to Shake Internet Market

All ministries, government departments and institutions are to be connected to the National Backbone Infrastructure and e-Government Infrastructure cable (NBI/EGI) which was launched on October 7.

This follows completion of the first and second phase of laying the government's fibre optic cable, being managed by the National Information Technology Authority (NITA-U) at Statistics House in Kampala.

President Yoweri Museveni has directed that for the investment in the NBI to be harnessed fully, all government data and voice services must use the infrastructure as their primary vehicle.

This means that all government internet bandwidth will be centrally procured, distributed and managed by NITA-U, which will significantly reduce expenditure on internet bandwidth both for government and other public priority users such as schools, universities and hospitals which use them for health and education services, as well as research.

It also means increased communication efficiency, as the NBI is stronger and more reliable than the ISPs.

However, the move has been met with anxiety from private Internet Service Providers (ISPs), for which government departments and public institutions have been the biggest client.

However, NITA-U says the concern is uncalled for, as the Internet market in Uganda still has high potential for growth, having one of the lowest penetration levels in the world. The NBI so far scales almost 2,000 km of fibre optic cable, covering more than 20 districts countrywide.

In addition, the NBI's large capacity presents opportunity for Business Process Outsourcing (BPO) service providers to grow business across the country. Government last month awarded contracts to three companies from India and Kenya - Dhanush, Raps-Spanco and TechnoBrain - to run Uganda's first BPO call centre. According to NITA-U Executive Director James Saaka, the firms will start with a start with a three-year pilot scheme in December 2011.

Uganda is several years behind Kenya in the BPO industry, and is apparently living up to its reputation as a late adopter. Kenya's KenCall, which employs hundreds of Kenyans, pioneered BPOs in East Africa six years ago.

Additionally, Uganda's Digital Migration Project is way behind schedule, while regional counterparts Kenya and Rwanda have already switched on.

Even the NBI, which was funded by a controversial US$ 103 million loan from Chinese bank Exim, is two years behind schedule and is now a subject of a forensic audit to address value-for-money queries and allegations of inflated costs and poor quality cables.

NITA-U ICT Ministry are themselves only recent creations, with lots of work to do to catch up with the region.

According to Saaka, the NBI will function as a commercial project to generate money and repay the Chinese loan. Additional revenue will be raised by leasing excess capacity to telecoms and other institutional users.

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