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MTN ceding ground, Warid biggest gainer

By Independent Team & Agencies

New study predicts mobile penetration hits 40%

A new report from Pyramid Research indicates that mobile penetration in Uganda is expected to increase from 39 percent in 2009 to about 70 percent by 2014. This jump will be driven by the successful liberalization of the sector and increased competition in this East African country.

The report titled “Communications Markets in Uganda,” authored by Sylwia Boguszewska, an analyst at Pyramid Research, notes that despite being one of the smallest markets in the region, Uganda is one of the fastest growing markets in Africa and the Middle East.

The research firm expects that in the next five years, Uganda will experience the second highest percentage increase in terms of mobile subscriptions among African countries, after Cameroon.

Boguszewska informed that mobile penetration increased from just 1.9 percent at year-end 2002 to an estimated 39.0 percent in 2009. She said this growth will continue and touch 70.7 percent penetration by 2014. Pyramid also expects the number of mobile subscriptions to exceed 27 million.

The liberalization process has transformed the Ugandan telecom sector and the country now has five mobile operators.

Boguszewska noted that three of these operators are already well-established: MTN Uganda, Uganda Telecom, and Zain Uganda.

“They were joined by Warid Telecom, which entered the market in February 2008, and Orange Uganda, which launched in March 2009. Anupam is due to enter soon, increasing the number of mobile operators to six.”

The entry of new players in the market has increased competition in Uganda leading to price wars. Warid is using a very aggressive pricing strategy to attract subscribers. It seems it is competing directly with MTN’s Zone that is popular amongst customers due to its pricing scheme.

“Last year, the three mobile operators — MTN Uganda, UTL, and Zain — commanded 85 percent of mobile market subscribers, while Warid Telecom, despite its late entry in 2008, managed to gain a significant 15 percent market share,” said Boguszewska.

The 26-page report offers a precise, incisive profile of Uganda’s converged telecommunications, media, and technology sectors based on proprietary data from Pyramid’s research in the Ugandan market.

The increased penetration has been prompted by the successful liberalization of the sector and increased competition.

Communications Markets in Uganda is part of Pyramid Research’s Africa and the Middle East Country Intelligence Report Series. Pyramid Research’s premium Country Intelligence Reports are the industry’s best available analysis on market trends, regulatory environments, and competitive dynamics for 60 countries worldwide.

With a population of around 32mn, Uganda is not only a large mobile market but also one with considerable room for further growth.

MTN, the South African giant of mobile communications in Africa, remains the dominant operator, but its competitors have been, for the most part, succeeding at slowly chipping away at its lead, demonstrating the fact that it does not have a stranglehold on the market.

Uganda combines a competitive and vibrant mobile market with a fixed-line incumbent that is fairly proactive and innovative. Not only has Uganda Telecom managed to overtake Zain to become the second ranked mobile operator, but it is investing in new services over its fixed-line infrastructure that will bring it growth and develop the sector. This includes a concentration on expanding public payphone facilities, and plans to expand its public wifi hotspot service, so as to increase the number of internet users in the country, and grow its potential future broadband subscriber base.

All of Uganda’s telecoms operators are licensed to offer services over any medium that they deem the most appropriate, providing they have the necessary facilities such as access to spectrum. This is due to Uganda’s unified licensing scheme. Uganda has a robust regulatory regime, and the unified licensing scheme has been praised as a model for other regulators.


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