Synopsis
Once referred to as the Pearl of Africa, then devastated by civil war, peace and economic reforms have transformed Uganda into one of the fastest and most consistently growing economies on the continent. The entry of MTN as the second national operator to compete with Uganda Telecom in all telecom services, including fixed lines and a total of five mobile networks has revolutionised the sector. At around 50%, total teledensity is still below the African average, and most market segments are experiencing strong growth. A simplified and converged licensing regime has significantly reduced barriers to market entry and increased competition, but this has also led to price wars.
Fixed-line and DSL penetration is low but has seen a renaissance recently on the back of wireless local loop (WLL) rollouts, prepaid services and an increasing demand for broadband access. The cost of international bandwidth has been reduced dramatically following the landing of the first international submarine fibre optic cables on the African east coast in 2009/10 to which landlocked Uganda is now connected via a national fibre backbone extending to its borders with neighbouring countries. On the access network level, 3% of fixed lines are using fibre for the last mile.
With GDP growth forecast to remain stable at around 7% per annum until at least 2016, growth prospects for Uganda’s telecoms sector are excellent.
Companies covered in this report:
- Uganda Telecom (UTL, LAP Green);
- MTN;
- UMEME;
- Seacom;
- Infocom (Altech);
- Internet Solutions.