Internet Shutdown Costs Uganda’s Telecoms Billions, Strains Digital Economy
KAMPALA, January 2026 – A recent four-day nationwide internet blackout in Uganda is estimated to have cost the country’s two largest telecom operators between UGX 22.8 and 24 billion in lost data revenues, highlighting the severe and immediate financial impact of digital censorship.
The shutdown, which began on the evening of Tuesday, January 13, and lasted until late Saturday, January 17, was implemented ahead of the country’s general elections. While the direct loss to telecom providers is substantial, economists and industry experts warn the total economic damage to Uganda’s businesses and citizens is far greater, potentially reaching hundreds of billions of shillings.
The Direct Hit: Telecom Data Revenues
The UGX 24 billion loss estimate for MTN Uganda and Airtel Uganda is based on their most recent public financial results, focusing specifically on data service income. This segment has become critically important for telecom companies as voice revenues decline.
· MTN Uganda’s Data Growth: For the nine months ending September 2025, MTN Uganda reported that data revenue surged by 30.2% to UGX 762.8 billion, making it a primary engine of the company’s growth.
· Sector-Wide Trend: The pattern holds across the region. Airtel Africa, the parent company of Airtel Uganda, reported that for the first time in the half-year ending September 2025, data revenues surpassed voice as the largest contributor to the group’s income, growing 37% to $1.16 billion.
A Controversial Estimate
The methodology of the loss estimate has sparked debate among finance professionals. Critics on industry forums like LinkedIn argue that presenting the figure as pure “lost revenue” is misleading.
In Uganda’s telecom market, where approximately 99% of customers use prepaid services, revenue is recognized when a data bundle is purchased, not when it is consumed. Therefore, a shutdown primarily defers usage rather than eliminating it permanently. The true immediate revenue loss is likely concentrated in the small postpaid customer base (about 1%) and some enterprise clients.
A more accurate financial impact for the telecoms, experts suggest, would be seen in costs related to compensating customers for expired bundles, providing goodwill credits, and managing reputational damage and potential customer churn.
The Ripple Effect: A Broader Economic Toll
The consensus among analysts is that the telecom revenue loss is just “the visible tip” of a much larger economic cost. Internet access underpins a wide range of daily economic activities.
· Disrupted Digital Commerce: The shutdown stalled mobile money transactions, agri-trade coordination, ride-hailing services, e-commerce, and digital credit. For small and informal businesses that rely on digital tools for daily cash flow, the blackout caused an immediate income shock.
· Estimated Total Cost: While difficult to measure precisely, some estimates suggest the total national economic cost of a similar 2021 shutdown was approximately UGX 390 billion. Given Uganda’s more digitized economy today, the cost of the 2026 blackout could be at the higher end of a UGX 350–450 billion range, with telco losses representing only about 6% of the total damage.
· **Global Context Research firm Top10VPN estimates the daily economic cost of the shutdown at $3.8 million, totaling about $16 million (roughly UGX 59 billion) over the 101-hour period.
Public Outcry and Adaptation
The shutdown triggered significant public frustration. Citizens highlighted losses from unused, expiring data bundles and condemned the action as a repressive measure more common in non-democratic regimes.
Once the internet was restored, Ugandans scrambled to bypass continued social media blocks. The use of Virtual Private Networks (VPNs) surged by 2,237% above the daily average recorded before the shutdown. There was also a notable spike in downloads of offline messaging apps like Bitchat, which uses Bluetooth to create decentralized networks without internet access.
Corporate Resilience Amid Disruption
Despite the temporary setback, both major telecoms are demonstrating strong underlying financial health.
MTN Uganda’s Recent Performance (9 Months to Sept 2025):
· Service Revenue: UGX 2.6 trillion (13.6% growth)
· Data Revenue: UGX 762.8 billion (30.2% growth)
· Fintech Revenue: UGX 809 billion (17.9% growth)
· Dividend Increase: Declared a second interim dividend of UGX 10.5 per share, a 40% increase, totaling UGX 235.1 billion
MTN’s CEO, Sylvia Mulinge, pointed to “resilient results supported by strong execution,” though the company noted that full-year service revenue growth might be tempered by regulatory pressures on voice calls and moderated fintech growth.
A Growing Global Trend
Uganda’s experience is part of a worrying global pattern. In 2025 alone, 28 major internet blackouts cost the world economy an estimated $19.7 billion—a 156% increase from the previous year. Governments are increasingly employing “pre-emptive” internet restrictions, citing security concerns even in the absence of immediate triggers like protests or exams.
As one industry observer noted, the debate over billions in lost telecom revenue underscores a more profound issue: “Internet shutdowns are not primarily a telco problem… The real victims are everyday users.” For a nation like Uganda, where digital tools are rapidly becoming the backbone of commerce and finance, the cost of connectivity blackouts extends far beyond corporate balance sheets and strikes at the heart of economic mobility and daily livelihood.
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