Uganda’s extravagance in dishing out GSM is now haunting the Uganda Communications Commission, as it emerges that the country has run out of GSM spectrum. The consequences is that the regulator can no longer allocate frequencies in the 900/1800 range.

As a result, more than half a dozen telecommunication license holders are at a loss as to whether to get out of business or to launch services over alternative platforms.

The crowded industry is now getting jittery with some companies now demanding that the Commission makes public the list of companies it had allotted frequencies in an effort to expose hoarders.

We have run out of GSM spectrum. Operators with multiple business plans have the option of using CDMA. But if their first choice was GSM, they will be forced to change strategy,” said Patrick Mwesigwa, Uganda Communications Commission director of licensing and technology.

Besides the existing GSM operators — MTN, Zain, Uganda Telecom Ltd and Warid Telecom — Hits Telecom is also in the process of rolling out its services.

However, a host of other companies over the course of last year were granted licenses to operate both telephony and infrastructure services. These include Anupam Global Soft, TMP Uganda Ltd, Datanet, Afsat Communications Ltd, Africa Online, Infocom and I-Tel Ltd. These companies may now be forced to choose CDMA or other technology.

“We are one of the victims,” said Joseph Barungi, general manager Africa Online. “We got the license, but we have had to change our direction while other plans were shelved.”

Mr Barungi says Uganda’s spectrum was hard done by the regulator offering the licenses on the cheap, and got the country into a hole. Initially spectrum was “ridiculously cheap” priced at Ush2 million ($1,142) per megahertz, and speculators moved in to acquire and hoard and sell once the country started running low on frequency.

Currently, the maximum amount of spectrum that can be allocated to a company is 14 MHZ, but at a cost of Ush16 million ($9,142) per megahertz, the cost has now gone through the roof, and even the big telecommunication firms are contesting the rate.

The options are CDMA and WiMAX. But even for the latter, there are a few misgivings about how the licences of this alternative technology were allocated. Apart from MTN, Zain and Warid, no other operators offer services on this platform.

Another company in this dilemma is I-Tel Ltd, which got two licenses last year, one to operate telephony services as a public service provider, and the other as a public infrastructure provider.

The public service provider (PSP) license was issued in early January before the company learnt that the GSM licences were in short supply. It has acquired the public infrastructure provider (PIP) license in September 2007. I-Tel is a sister company of Gemtel of Southern Sudan. Gemtel came into the limelight last year after it was discovered that it was hooked onto Uganda’s international dialing code.

The company then moved to apply for a Ugandan license — a move that would also in future enable it to link its Sudan operations in a cross- border seamless network — but it was told that it could only operate a CDMA technology, different from its Sudanese operations which runs a network supported by GSM spectrum.

“As of now we will run CDMA network, which is different from our network in Sudan. So this cannot allow Gemtel subscribers to be interconnected with I-Tel in terms of cross-border network as the networks are not compatible,” said Augustus Caesar Mulenga, a senior official of I-Tel.

Experts in the telecommunications industry say GSM is the preferred technology in this region as it offers a number of advantages including international roaming capacity between different providers, easy activation and switching of SIM cards as well as compatibility with the handsets existing in the market.

In this region, few countries use CDMA and this could deal a blow to the market trends that have evolved in the past few years between operators to establish cross-border roaming agreements.

While CDMA is more advantageous for data with high speeds, experts say it presents challenges in a country like Uganda where handsets use SIM cards, which are not a component in CDMA technology. Instead, the handsets come with a special serial number, which means replacing a handset is not as instant as would happen in GSM supported network.

While operator licenses can be acquired cheaply in Uganda, the high costs related to spectrum are now an issue that operators are finding hard to negotiate, and very likely, the companies that have picked up mobile telephony licenses may fail to roll out in the specified time — in which case UCC would revoke the contracts.