Uganda Communications Commission [UCC] executive director, Godfrey Mutabazi, this week released the market report for the months April-June 2017.
The report, as had been projected indicates vibrancy and growth in the Communications Sector as we open up for investments especially in Digital and online Broadcasting.
The report presents an over view of trends in mobile and data, in subscriptions, increase in data coverage, emergence of new services, increased of uptake of mobile financial services pricing as well as key regulatory developments.
The information derived from the market and industry data covers key aspects of the communications sector in mobile and fixed telephony, traffic growth, the Communications Infrastructure, internet and data services, broadcasting, tariffs, and consumer affairs among others.
Mutabazi said the last half of 2016/17 ending June 2017 was dominated by effects of the national SIM Card verification and validation exercise, retail price revisions for mobile broadband internet, increasing competition and market disruptions from Over-the-Top Technologies (OTT) on incumbent telecommunications service providers.
For the first time in the last 7 years, the sector posted a drop in mobile subscriptions between March and June 2017. At the end of June, total mobile subscriptions stood at 23,608,610 from 23,665,556 at the end of March 2017.
The 56,946 drop in mobile subscriptions is largely explained by: a drop in postpaid subscriptions motivated by the declining differential between pre-paid and post-paid tariffs and SIM card ownership harmonization (abandonment of extra SIMs by users) as a result of the SIM card verification and validation.
Mobile Telephony Penetration
Telephone penetration stagnated at 63.7. Broadly, this implies that on average there are 63 active mobile SIM cards for every 100 individuals.
Broadband Internet increasingly being accessed on mobile devices.
Mobile hand held devices continue to be the medium of choice for accessing broadband internet (handsets, Mi-Fis, Dongles etc). As a result, the pace mobile broadband growth, has and continues to outpace, that of fixed broadband.
As at the end of June 2017, mobile internet subscriptions had grown by 14.5% compared to the growth rate achieved by end of March 2017.
This growth in mobile broadband uptake is attributable to: increased price competition in the retail broadband market and introduction of low cost internet enabled hand held devices/handsets by a number of players in the market.
Mobile telephony pricing
Domestic headline mobile voice headline tariffs have remained largely unchanged, despite an upward movement in the overall price level in the overall economy.
For MTN and AIRTEL that have location-based dynamic tariff discounting offers, the headline rates per second for on-net traffic during this period were Shs 7 and 6 respectively.
For off-net calls using this location-based dynamic tariff discounting, the pricing for MTN and AIRTEL has remained unchanged and similar at Shs 7 per second.
Mobile Voice Traffic
Total domestic voice traffic has grown by 9% between end of March and end of June 2017 to a total of 6.74 Billion minutes.
The bulk of this increment was on-net voice traffic, and largely driven by intense price competition and network effects. However, there was at the same time there was a 22 Million drop in the number of minutes for domestic off-net traffic.
This may be attributed to the increasing adoption of on-net voice bundles and increasing incidence of multiple sim card ownership.
Mutabazi said the growing importance of Over-the-Top (OTT) applications in voice communications continues to apply downward pressure on voice traffic. This trend is not specific to Uganda, but has been observed elsewhere in the world.
The increasing potential and business case for partnerships between OTT application owners and mobile network operators, especially if the latter are to remain relevant and maintain financial sustainability in the market.
Broadcasting over Internet Protocol (IP) and introduction of Triple and Quad-play services, will hasten the merger between traditional broadcasting and telecommunications.
With technology convergence increasing pace, the traditional broadcaster is slowly becoming obsolete. As a result, there is expected an increase in the number and magnitude of mergers and acquisitions (M & A) in this sub sector.