Ugandan telecoms are bracing for a legal battle over a long-standing government request for the companies to open up their billing information to independent review. Since 2016, the government pushed for the acquisition and implementation of INMS (shorthand for Intelligent Network Monitoring System) a software that would record billing for voice and data.
The government, sources say, is driven by a desire for fair assessment of tax levied on the telecoms that currently relies on self-declared earnings.
However, the move, if successfully implemented, would have broad consequences particularly for Mobile Money (MM). MM is a grey area because telecoms while engaged in financial services are not financial institutions but rather technology firms. Moreover, with no national payment platform, the technology of transmitting money via mobile phones is yet to mature to the flexibility of card payments – despite being more popular with users. MM operations currently more than quadruple the volume of money flowing through banks according to some estimates.
In late 2017, the Uganda Communications Commission wrote to the telecoms asking them to implement INMS in partnership with the Uganda Police Force(UPF). The action has sparked a quite protest amongst telecoms. Some like Airtel have pointed out that the UPF has no legal basis to implement INMS, and that while fears of MM being abused for laundering money and other illegal activities – the onus of dealing with matters of financial crimes lies with the newly created Financial Intelligence Authority (FIA).
At stake, however is the effect INMS would likely have on the massive money economy controlled by the Telecom sector through Voice, Data and MM operations. For investors daily reports of wide spread corruption within the government and security sector will likely factor in their assessment of the timing of the reforms.