2012-02-03 16:16:59 - Uganda Telecommunications Report Q1 2012 - a new market research report on companiesandmarkets.com
The Q1 2012 update on Uganda´s telecommunications market contains new five-year forecasts for the country´s mobile, internet and fixed-line telephony markets. This quarter we have extended those forecasts through to the end of 2016. Since our last update, new data have come in for MTN Uganda, which is owned by South Africa´s MTN Group, and for Orange Uganda, which is backed by France Telecom. Our mobile subscriber forecast for Uganda incorporates subscriber data for Q211 and Q311.
Based on the available data, we estimate that the country´s mobile customer base grew by 4.4% in the second quarter of the year to reach 15.182mn. This figure was up by 20.4% y-o-y. We estimate there were more than 13.8mn mobile lines in Uganda
at end-2011, reflecting penetration of 48.5%. In 2011 as whole, we estimate that Uganda´s mobile subscriber base will grow by over 21%, with the number of customers rising to more than 16.7mn.
In September 2011, Uganda´s mobile market leader MTN announced that it had increased its tariffs in order to halt the downward price pressures. The company´s chief executive Themba Khumalo arguing that, in light of the country´s economic condition, the tariff structure needed to be adjusted to prevent the industry from ´self-destruction´. MTN was not the only operator that readjusted its tariffs in an effort to reverse the earlier downward spiral affecting ARPUs. A few days after MTN´s readjustment, it was announced that rival operators Orange and Warid Telecom had increased their calling rates. Orange´s CEO highlighted inflation had had an impact on the cost of doing business in Uganda, necessitating the tariff adjustments.
In the second quarter of 2011, MTN reported a significant fall in the level of its blended ARPU. New ARPU data have enabled us to revise our mobile ARPU forecast for Uganda. In 2011, we believe that both MTN and Airtel experienced a sharper decline in their blended ARPUs compared with the previous year. The sharper declines corresponded to the accelerated price war that prevailed throughout much of the year. In 2012, we expect stronger economic growth to help raise GDP per capita levels. Although this could lead to increased mobile service usage, there is potential for this to be counterbalanced by rising inflation. In 2012, we predict a 5.3% increase in Uganda´s average blended ARPU, which is expected to rise to rise to UGX9,141 (US$3.3).
Recent noteworthy developments in Uganda´s telecoms sector include the news in October that Uganda´s telecoms regulator the Uganda Communication Commission (UCC) announced that it would delay the launch of mobile number portability (MNP) until it could find a suitable model. The UCC´s director of technology and licensing, Patrick Mwesigwa, said that, after evaluating MNP´s impact in Kenya and South Africa, it has proved to be too expensive considering its benefits.
Also in October, it was reported that Chinese vendor Huawei had completed the second stage of Uganda´s UGX201bn (US$71.2mn) fibre-optic backbone two years after the expected completion date. The second stage of the project comprises 1,380km of cable linking Uganda to South Sudan and Kenya. The third and final stage of the rollout is due to begin in January 2012 and will connect the Ugandan capital, Kampala, to Mombasa on Kenya´s coast. Phases two and three of the project are meant to connect all major towns, stretching about 19,000km. The fibre-optic cable network is intended to link Uganda to the submarine cable on the East African coast and provide faster and cheaper internet access.
Uganda remains in 14th position in our latest set of Telecoms Risks/Rewards Ratings for Sub-Saharan Africa. Apart from a slightly lower score in the Country Risks category, Uganda´s scores remain unchanged this quarter.
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