Boston, MA -- (ReleaseWire) -- 01/07/2014 -- Uganda's market opportunities lie predominantly in the mobile sector where subscription penetration is below 50% despite strong competition. The main barrier to growth is the Uganda remains one of a handful of countries with a mobile penetration rate of less than 50% as of June 2013. This is mainly because of poor network coverage in rural areas where the majority of the residents live. Although this development would have spurred investment in rural areas, BMI notes operators are increasingly deploying high-value services, including 4G LTE, in urban areas to sustain revenue growth. We expect this trend to continue until a strong business case for rural roll-out is established, particularly in the form of cost efficiency and sustainable revenue growth.
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- Despite the regulator reporting that SIM registration led to the deactivation of 1.5mn connections, the market's operators still reported growth in Q313.
- ARPU continues to fluctuate around the US$4 mark with little chance of rising.
- Fixed internet subscriptions contracted marginally in Q313
Uganda remained in 15th position in BMI's latest RRR table with an aggregate score of 40.3, up from the previous quarter. Uganda continues to outperform many of its peers in the country risks category, which reflects a positive real private consumption growth outlook during our five-year forecast period to 2017.
However, the country scores below the regional average in the other three categories, the lowest being the Industry Rewards category, which is held back by subscriptions growth, low ARPUs and operators' weak financial performances.
Key Trends & Developments
Operators continue to target mobile financial services as a key means of encouraging loyalty and spending on their networks. MTN introduced a life insurance policy for its clients in partnership with AON and Jubilee Insurance. A platinum subscription costs UGX22,500 a year and gives benefits up to UGX5mn. Airtel partnered with the Grameen Foundation to offer savings groups and credit to Ugandan consumers.
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