Hotspot operators win reprieve as UCC suspends crackdown

The Uganda Communications Commission (UCC) has suspended enforcement action against community Wi-Fi hotspot operators, signalling a shift towards dialogue and regulatory reforms aimed at protecting innovation while bringing the fast-growing sector into the formal economy.

The move follows a meeting on Thursday between UCC and the Alliance of Hotspot Operators Uganda (AHOU), during which the regulator pledged to work with operators to develop a compliance framework that supports affordable internet access without compromising consumer protection or network integrity.

UCC Executive Director Nyombi Thembo said the commission had directed its enforcement teams to halt action against hotspot operators despite an earlier public regulatory notice remaining in force.

“Although our public regulatory notice remains in effect, I have officially directed our teams to suspend all enforcement actions. This grace period will allow us to engage, learn and co-create a realistic path to compliance,” Thembo said.

The regulator has in recent weeks come under criticism after warning operators of unlicensed public Wi-Fi hotspots to regularise their operations or face enforcement action. Many hotspot businesses, run largely by young entrepreneurs, argued that licensing requirements and compliance costs threatened their livelihoods.

Thembo acknowledged that the operators were filling an important gap by providing affordable internet services to communities while creating employment opportunities.

“These young, creative hotspot operators are addressing a real community need by providing affordable data to ordinary Ugandans and creating vital livelihoods. We do not want to stifle this spirit of innovation,” he said.

However, he warned that operating outside the regulatory framework posed risks, including radio spectrum interference, unfair competition and threats to consumers’ data privacy.

To inform future regulation, UCC has launched a technical study of hotspot business models, with members of the alliance demonstrating their network architecture and billing systems to the commission’s engineers.

According to Thembo, the exercise will help the regulator design a compliance framework that reflects the realities of small-scale hotspot businesses.

The commission also announced plans to convene discussions involving major telecommunications companies, internet service providers, the Uganda Revenue Authority (URA) and local governments.

The talks will explore ways of lowering wholesale bandwidth costs and simplifying tax arrangements for hotspot operators to enable them formalise their businesses without undermining their viability.

“Our goal is to negotiate fair wholesale bandwidth pricing and simplified, business-friendly tax structures that won’t kill small businesses,” Thembo said.

He said UCC’s objective was to create a structured, safe and legally compliant digital ecosystem while ensuring the market remains open to innovation.

“We want a structured, safe and legally compliant market, not an exclusive one. By listening to operators, learning from their business models and aligning them with national laws, we will achieve a win-win for Uganda’s digital transformation,” he said.

The latest development marks a softer regulatory approach after concerns that strict enforcement could undermine efforts to expand affordable internet access, particularly in urban and peri-urban communities where neighbourhood Wi-Fi hotspots have become an increasingly popular alternative to conventional mobile data services.