Overview:
The performance was boosted by data revenue, improvement in broadband coverage, smart phone penetration and data traffic.
Uganda’s telecom sector continued to make strides in terms of profitability and expansion in 2022 despite operating under a difficult macroeconomic environment brought about by the rising cost of living.
For instance, the top two telecommunications companies, MTN Uganda and Airtel Uganda posted huge profits even when the inflation rate kept rising thought the year, eventually hitting 10 percent, the highest ever recorded in Uganda since December 2015.
This was largely influenced by higher fuel prices, rising domestic food prices due to dry weather conditions across the country, as well as persistent production and supply chain challenges.
“The combination of these factors has had a significant impact on the spending power of our customers in the period under review,” said the outgoing MTN Uganda chief executive officer, Wim Vanhelleputte, while releasing results of in quarter one of 2022 in May.
MTN’s profit after tax grew by almost half to Shs193.6 billion, enabling it to declare an interim dividend of Shs5 per share.
The performance was boosted by data revenue, which increased by 45% underpinned by a 20% growth in active data users, improvement in broadband coverage, smart phone penetration and data traffic.
“The combination of these factors has had a significant impact on the spending power of our customers in the period under review,”
Wim Vanhelleputte, former mtn uGANDA ceo
This was largely due to the telecom company’s strategies that ensured that they maintained their customers, without heavily impacting their revenues.
This was enshrined in MTN’s Ambition 2025, which involves funding its network expansion and improvement, accelerated through selective partnerships and taking advantage of the “MTN brand” as the most trusted and valued in Africa. It is supported and funded through enhanced cost and capital expenditure efficiencies.
MTN Group is considering consolidating its infrastructure assets and platforms such as financial technology, fibre and data centres, among others, to build value and attract third-party capital and partnerships into these businesses over the medium-term across the 14 subsidiaries.
“Our investment and continued execution of our commercial strategy has enabled us to increase MTN Uganda subscriber base by almost 9 per cent to 16.3 million, while our active data subscriber base grew by 21.8 per cent to 5.7 million,” Vanhelleputte said.
MTN said it would continue partnering with fintechs to reach out to people who cannot afford the traditional financial system, to access services like micro-insurance, online savings, and others.
Airtel on its part had no aggregated figures for individual subsidiaries but said total revenues for Africa grew by 13 per cent to $1.2 billion, due to a strong performance in the voice, data, and mobile money segments.
The business operations in East Arica posted the highest growth rates of 28 per cent, according to Airtel Africa CEO Segun Ogunsanya.
Airtel Uganda marketing manager Henry Njoroge said they are constantly looking for innovations that make their services more affordable so that their customers stay connected.
“In addition, we are bringing 88 per cent more data to our customers who purchase daily 24-hour validity bundles. We recognize that most of our people earn a daily income. We are intentional in ensuring that this group of our customers are supported with affordable data to make their business communication. This is the glue that binds Uganda’s small and micro enterprises,” he said.
According to Uganda Communications Commission, telephone subscriptions grew by an additional 425,000 new connections during the quarter Jan –March 2022. This brought total telephone connections in the market to 30.6 million active lines at the end of March 2022. The number of devices (phones, tablets, car trackers and all SIM using devices) accessing the telecom network grew from 34.1 million in December 2021 to 35 million in March 2022.
The 900,000 new devices yet again outstripped the number of new active SIM cards
In November, the management of Uganda Telecom Limited (UTL) officially handed over the administration to the Uganda Telecommunications Corporation Limited (UTCL) after fulfilment of the terms agreed upon in the Asset Sale and Procurement Agreement (APA). The new management is liable for all UTL’s earlier liabilities totalling Shs165 Billion.
According to the Minister of State for Investment and Privatization, Ms Evelyn Anite, the shift from UTL to UTCL is a great milestone in the development of the country because the government is going to be in full control of the company.
“Now we are having a company (UTCL) that is 100 per cent Ugandan and the President has ordered that it should be run as a national company without involving investors,” Ms Anite said.
UTCL is 60 per cent owned by the Ministry of Finance while the Ministry of Information Communication and Technology (ICT) while National Guidance owns 40 per cent of the company.
In the same vein, Seacom concluded the acquisition of Africell Uganda’s fiber and data assets during the quarter. This followed Seacom’s earlier acquisition of Nairobi-based Pyramid Telecom’s metro fiber network in 2021.
The Ugandan acquisition brings onto the Seacomm footprint more than 750kms of Metro Fibre in Kampala and a 250 Square Meter Data center in the heart of the city.
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