2009 Uganda - Telecoms, Mobile, Broadband and Forecasts

Publication Overview

This annual report provides a comprehensive overview of trends and developments in Uganda’s telecommunications market. Subjects covered include:

·         Key statistics;

·         Market and industry overviews;

·         Regulatory environment and structural reform;

·         Major players (fixed, mobile and broadband);

·         Infrastructure development;

·         Mobile voice and data markets, including 3G;

·         ARPU trends;

·         Internet development;

·         Broadband, including 3G mobile;

·         Convergence (voice/data, fixed/wireless/mobile);

·         Mobile market forecasts.

Researcher:- Peter Lange

Current publication date:- August 2009 (8^th Edition)

Next publication date:- August 2010

Executive Summary

Once referred to as the Pearl of Africa, then devastated by civil war, peace and radical economic reforms have transformed Uganda into one of the fastest and most consistently growing economies on the continent. The entry of South Africa’s MTN as the second national operator to compete in all telecom services, including mobile, has revolutionised the sector.

A new simplified and converged licensing regime has significantly reduced barriers to market entry and increased competition, but this has also led to an unsustainable price war between now five major mobile networks – MTN, Zain (formerly Celtel), UT, Warid Telecom and HiTS Telecom in which France Telecom’s mobile unit Orange has bought a majority stake. However, at a market penetration of only around 30% there is ample room for further growth, and hundreds of millions of US$ are being invested into new infrastructure.

In an environment of rapidly falling average revenue per user, the mobile operators are trying to find ways of generating additional revenue streams. Mobile data and 3G broadband services as well as m-payment and m-banking services are at the forefront of this development, in a country where less than 10% of the population currently have Internet access or hold bank accounts.

In the broadband sector, competition comes from traditional ISPs offering wireless access using a variety of technologies, including WiMAX. At least two of the mobile operators have themselves adopted this technology as an overlay to their GSM networks. In addition, both fixed-line operators, Uganda Telecom and MTN Uganda offer a range of data services including ISDN, ADSL and local and international leased lines.

However, broadband tariffs have remained high because landlocked Uganda depends on satellites for its international bandwidth, but strong growth in the number of cybercafes and other public access facilities has helped to increase Internet awareness and usage.

The arrival of international submarine fibre optic cables at the African east coast for the first time in 2009/10 will dramatically reduce the cost of international bandwidth and enable converged voice, data and video/entertainment services. Several national backbone networks are being rolled out, and major initiatives have been launched to bring telecommunication services and the Internet to rural areas of the country.

Key highlights:

·         Forecasts for Uganda’s mobile market to 2010 and 2015;

·         Profiles of major players in all market sectors;

·         Decreasing ARPU under intense competition between five mobile networks;

·         Mobile penetration still well below the regional average;

·         Arrival of international fibre bandwidth in 2009 will revolutionise the market;

·         National fibre backbone to enable converged voice, data and video services;

·         Successful expansion of services to rural areas through rural development fund.

Zain Uganda monthly ARPU – 2006 - 2009

(Source: BuddeComm based on company data)

Data in this report is the latest available at the time of preparation and may not be for the current year.

The following notes provide some background to our scenario forecasting methodology:

·         This report includes what we term scenario forecasts. By describing long-range scenarios we identify a band within which we expect market growth to occur. The associated text describes what we see as the most likely growth trend within this band.

·         The projections shown in the tables in this report are based on our own historical information, as well as on telecommunication sector statistics from official and non-official, national and international sources. We assume a possible deviation of 15-20% around this data.

·         All statistics for GDP, revenue, etc are shown in US$, in order to maintain consistency within and between markets. At the same time we acknowledge that this can introduce some irregularities.

For those needing high level strategic information and objective analysis on the telecommunications sector in Uganda, this report is essential reading and gives further information on:

·         One of the most competitive mobile markets in the region;

·         Government policies affecting the telecoms industry;

·         Market liberalisation and regulatory issues;

·         Telecoms operators – privatisation, acquisitions, new licences;

·         Internet and broadband development and growth;

·         3G mobile broadband rollouts and pricing;

·         Average Revenue per User (ARPU);

·         The emergence of m-banking and m-payment services.

Table of Contents

• 1. Key Statistics
• 2. Telecommunications Market
  • 2.1 Overview of Uganda’s telecom market
• 3. Regulatory Environment
  • 3.1 Background
  • 3.2 Regulatory authority
    • 3.2.1 Uganda Communications Commission (UCC)
  • 3.3 Telecommunications Policy 1996
  • 3.4 Uganda Communications Act 1997
  • 3.5 Telecom sector liberalisation in Uganda
    • 3.5.1 New competition framework 2005
    • 3.5.2 National ICT Policy
    • 3.5.3 Licensing prior to 2007
    • 3.5.4 New licensing regime 2007
    • 3.5.5 Additional mobile networks
  • 3.6 Interconnection
  • 3.7 Number portability (NP)
  • 3.8 Rural Communications Development Fund (RCDF)
  • 3.9 Regulation of Interception of Communication Bill 2007
  • 3.10 Cyber crime legislation
  • 3.11 Consumer rights
  • 3.12 Fixed-line statistics
• 4. Fixed Network Operators in Uganda
  • 4.1 Uganda Telecom (UT)
    • 4.1.1 Privatisation
    • 4.1.2 Network infrastructure
    • 4.1.3 Wireless Local Loop (WLL)
  • 4.2 MTN Uganda
    • 4.2.1 Wireless local loop (WLL)
    • 4.2.2 National backbone network
• 5. Telecommunications Infrastructure
  • 5.1 National fibre backbone
  • 5.2 International infrastructure
  • 5.3 VSAT networks
• 6. Internet Market
  • 6.1 Overview
    • 6.1.1 Internet statistics
  • 6.2 Internet access locations
  • 6.3 Limited availability of PCs
  • 6.4 Dial-up
  • 6.5 International bandwidth
  • 6.6 Uganda’s ISP market
    • 6.6.1 Selected ISPs
    • 6.6.2 Uganda Internet Exchange Point (UiXP)
  • 6.7 E-services
    • 6.7.1 E-commerce
    • 6.7.2 E-banking
    • 6.7.3 E-government
• 7. Broadband Market
  • 7.1 Asymmetrical Digital Subscriber Line (ADSL)
  • 7.2 WiFi
  • 7.3 WiMAX
• 8. Convergence
  • 8.1 VoIP telephony
  • 8.2 Next generation Networks (NGNs)
  • 8.3 Broadband over powerlines (BPL)
  • 8.4 Overview of the broadcasting market
  • 8.5 Digital TV
    • 8.5.1 Broadband TV (IPTV)
    • 8.5.2 Pay TV
• 9. Mobile Communications
  • 9.1 Overview of Uganda’s mobile market
    • 9.1.1 Mobile statistics
  • 9.2 Major mobile operators
    • 9.2.1 MTN Uganda
    • 9.2.2 Zain Uganda (Celtel)
    • 9.2.3 Uganda Telecom Ltd (UTL)
    • 9.2.4 Warid Telecom
    • 9.2.5 Orange Uganda (HiTS Telecom)
    • 9.2.6 i-Tel
  • 9.3 Regulatory issues
    • 9.3.1 Licensing
    • 9.3.2 Taxes
    • 9.3.3 Tariffs and price war
  • 9.4 Mobile data services
    • 9.4.1 Short Message Service (SMS)
    • 9.4.2 GPRS and EDGE
    • 9.4.3 Multimedia Messaging Service (MMS)
    • 9.4.4 BlackBerry
    • 9.4.5 Third generation (3G)
    • 9.4.6 Mobile TV
    • 9.4.7 M-payment, m-banking
• 10. Forecasts
  • 10.1 Forecasts – mobile market to 2015
• 11. Glossary of Abbreviations

• Table 1 – Country statistics Uganda – 2009
• Table 2 – Telephone network statistics – 2008
• Table 3 – Internet provider statistics – July 2009
• Table 4 – Internet statistics – 2008
• Table 5 – Mobile statistics – 2008
• Table 6 – National telecommunications authority
• Table 7 – Fixed lines in service and teledensity – 1995 - 2008
• Table 8 – MTN Uganda fixed-line subscribers – 2004 - 2008
• Table 9 – Internet users and penetration rate – 1995 - 2008
• Table 10 – International Internet downlink bandwidth – 1999 - 2008
• Table 11 – Mobile subscribers and penetration rate – 1996 - 2008
• Table 12 – Mobile subscribers by operator and annual change – 2008
• Table 13 – MTN Uganda subscribers – 2000 - 2009
• Table 14 – MTN Uganda monthly ARPU – 2002 – 2009
• Table 15 – Zain Uganda monthly ARPU – 2006 - 2009
• Table 16 – Forecast mobile subscribers – 2010; 2015

• Exhibit 1 – International gateway licences fees
• Exhibit 2 – Licensed ISPs in Uganda – 2007