Communications Minister John Nasasira said that there were no plans to renege on the five-year exclusivity periods agreed with the two national telephone operators, while the minister in the prime minister's office, Mondo Kagonyera, said the government would not make any moves that could throw the 'industry into anarchy'.

Museveni wants the cabinet to draft a law that would allow investors in information technology to set private links to the information highway,by passing the telecom operators which have agreements giving them control over international traffic for five years.

MTN's exclusivity period ends next year and UTL's in 2005.

The ministers were reacting after a local daily published details of the memo sent in September from Museveni to Prime Minister Apollo Nsibambi, instructing him to initiate action to terminate agreements that give MTN and UTL monopoly rights to international voice-over traffic and internet services to open the way to new investment.

Museveni said that the existing operators could use the duopoly to block or slow down sector entry by overcharging new entrants for international access. The president said he saw internet specialisation as an opportunity to reverse the brain drain by getting Ugandan professionals to work for firms abroad without having to leave the country.

MTN Uganda CEO Thomas Bragaw said that the proposals would lead to a loss of investor confidence in the country.