Uganda Telecommunications Corporation (UTel) to take on operationalisation of National Backbone Infrastructure

Government is moving to revitalise the Uganda Telecommunications Corporation (UTel), after it secured investment commitments from Rowad Capital Commercial LLC (RCC), a United Arab Emirates (UAE) company.

The move is aimed at capitalising UTel to take on the management and commercialisation of the ICT National Backbone Infrastructure (NBI) in Uganda.

According to the Minister of ICT and National Guidance, Hon. Chris Baryomunsi, the company will take a 60 per cent shareholding in UTel, while government will maintain a 40 per cent share with the Ministry of Finance, Planning and Economic Development having 25 per cent and the ICT Ministry, 15 per cent.

The Minister made the revelation while leading entities under the Ministry to present the Ministerial Policy Statement to the Parliament Committee on ICT and National Guidance on Thursday, 03 April 2025.

He added that the new partnership will see RCC make an initial investment of US$25 million, and thereafter, US$200 million over the next three years.

“We have had negotiations and are signing agreements for the new partnership to take effect. Government agreed that we transfer the management and commercialisation of the NBI from Soliton Telmec to UTel,” Baryomunsi said.

Legislators raised concerns about the running contract with Soliton Telmec that was contracted by NITA-U to manage the NBI.

Committee Chairperson, Hon. Tony Ayoo noted that the National Information Technology Authority – Uganda (NITA-U) contracted Soliton Telmec on a 15-year agreement, with the company in its 12th year of implementing the NBI project.

“Would it not be cheaper to allow Soliton to run their contract for the remaining three years? This period is not too much if it is negotiated well so that we get Soliton out without any cost,” Ayoo said.

Baryomunsi said RCC indicated interest to make immediate investment and thus waiting for the contract with Soliton Telmec to end would delay the recapitalisation opportunity for UTel.

“A decision was taken to terminate the contract with Soliton, which will have financial implications due to compensation. The Auditor General has carried out an audit and advised on the implications which government will pay,” said Baryomunsi.

He also noted that the new partnership will increase government’s gains from the NBI project, as well as strengthen the commercialisation aspect.

“The NBI has largely been used by government agencies with few clients from the private sector. If we fully commercialise it, we will open it up to the private sector so that we can fetch more money,” Baryomunsi added.

He said a Board of UTel has been appointed comprising members from government and RCC, which will make a formal resolution that will create a bank account for the initial investment to be made.

For the financial year 2025/2026, the Ministry presented a budget request of over Shs205 billion to cater for recurrent and development expenditures, as well as arrears worth over Shs100 billion.

NITA-U requires a total of Shs268 billion including arrears (Shs10.3 billion) for the 2025/2026 financial year.

Baryomunsi said the Ministry faces challenges including slow automation of government systems and processes, inadequate uptake of ICT due to high costs of internet and ICT equipment, plus existence of many stand-alone government systems that are not synchronised.

“In the next financial year, we aim to improve efficiency in business processes and public service delivery as well as strengthen the enforcement of policies, laws and regulatory frameworks and institutional coordination,” Baryomunsi said.

Distributed by APO Group on behalf of Parliament of the Republic of Uganda.

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