Uganda: Intense Competition, Mobile Rollouts and Lower Prices to Boost 3G Services22 Aug 2011 • by Natalie Aster
The future of the Uganda's telecommunications sector will depend on who can get to the mass market with mobile technologies. A mixture of technologically simpler yet sticky data services, such as mobile money, and more advanced applications using 3G will be the key to revenue generation in the mobile segment, according to the “Uganda Intelligence Report“ by Pyramid Research. The report offers a precise profile of the country's telecommunications, media and technology sectors based on proprietary data from Pyramid's research in the market. It provides detailed competitive analysis of both the fixed and mobile sectors, tracks the market shares of technologies and services and monitors the introduction and spread of new technologies.
"Pyramid believes that the main drivers of growth in Uganda will be continuing expansion of mobile subscriptions into rural areas, declining costs of voice, as well as international bandwidth thanks to connections to coastal countries with undersea cables, further investments in 3G and intensifying competition for broadband networks," says Pyramid Analyst Kerem Arsal. On the mobile side, the low penetration level, along with the presence of seven mobile operators, will generate increasing voice and data revenue. "In the fixed segment, urban areas offer vast opportunity for growth of broadband, and deployment of fixed wireless can aid further expansion," he adds.
Published: August 2010
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We expect the Ugandan telecommunications sector to grow at a CAGR of 10.2% between 2011 and 2016 to reach $1.23bn, thanks to favorable developments in both the mobile and fixed segments. On the mobile side, the low penetration level along with the presence of seven mobile operators will generate increasing voice and data revenue. However, the entry of Airtel and the aggressive declines in voice tariffs will translate to a higher reliance on data revenue in the future. The growth of data revenue from $74m in 2011 to $283m in 2016 will be supported by network upgrades and movement to 3G by operators other than MTN, UTL and Orange.
In the fixed segment, the Ugandan market has recently become highly active, with a rising number of broadband providers that are eagerly anticipating growth thanks to the new connections to the undersea cables coming from the Eastern coast of Africa and thus the increased affordability of these services. We believe that the positive signals that are emerging in other Eastern African countries, such as Kenya and Tanzania, will trickle to Uganda throughout our forecast period. Thus, with a combination of expansion of access and affordability, we project fixed broadband revenue to comprise 15.9% of the sector’s revenue in Uganda by 2016.
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