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Badru Ntege, Anwar Soussa and Rob Shuter
A look at MTN, Airtel, Africell ahead of August SIM registration deadline
Kampala, Uganda |ISAAC KHISA and JULIUS BUSINGE| MTN Uganda has recorded a surge in revenues for the six months ending June 30, signaling a possible rebound in the country’s telecom industry.
According to the latest half year performance figures, MTN Uganda registered a 9.5% growth in revenues to Shs678.2 billion compared to Shs619.4 billion registered in 2016 and Shs633.6 billion in 2015.
Rob Shuter, the firm’s group president and chief executive officer, said the revenue growth is attributed to an increase in subscriber numbers and the subsequent rise in demand for data and digital services like mobile money.
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“MTN Uganda increased its subscriber base by 5.8% to 11. 2 million, driven by attractive personalised bundled products, superior network quality and effective distribution,” he said.
During the past six months, MTN has undertaken a review of the group strategy and developed a clear growth plan for the firm arranged under six strategic pillars (BRIGHT) comprising: Best customer experience; Returns and efficiency focus; ignite commercial performance; Growth through data and digital; Hearts and minds; and Technology excellence. This is anticipation that the future of mobile network operators lies in the projected data boom.
“Our focus during the second half of the year will be to entrench our BRIGHT strategy, complete our network investment programme and build medium-term financial key performance indicators and targets for the Bright strategy.”
Shuter said the telecom firm has successfully registered 89% of its subscriber base under the new SIM card registration requirements ahead of the Aug. 31 deadline.
At the group level, MTN earned 3.9 billion rand (US$294.35 million), in the six months ended June, compared with a loss of 4.9 billion rand, a year earlier, citing absence of one-off charges related to a US$1.1 billion Nigerian fine and the growth in data earnings.
MTN agreed to pay the fine, which was reduced from US$5.2 billion, in June last year after a prolonged legal battle to end a dispute in Nigeria over missing a deadline to cut off unregistered SIM cards. Similarly, its subscribers fell 3.6% to 232 million due to losses in Nigeria, its biggest market, and Ghana.
Founded in 1994, MTN’s regulatory troubles in the past few years had held back growth and threatened its image as one of post-apartheid South Africa’s biggest commercial successes, with operations in over 20 countries in the Middle East and Africa.
In Uganda, out of the eight telecom firms, MTN says it controls 54.7% of the market share. This new development comes at the time telecom firms in the country are currently looking at data and digital services as the next growth frontier.
But this growth is dependent on the outcomes of the SIM card registration, according to industry executives.
Meanwhile, Mohammad Yahfoufi, the marketing coordinator of Africell Uganda toldThe Independent that the future revenue growth in the telecom industry will depend on how the SIM card registration exercise will be handled.
He said many people are currently blocked from buying SIM cards because they do not have national identity cards. At the moment, Africell Uganda says it has 2.1 million customers.
“That is an issue being handled by Uganda Communications Commission,” he said, adding that their appeal is that the exercise is hurting the telecom industry due to challenges that are not of their own making.
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Yahfoufi remained guarded on the firm’s performance, and said over 50% of their revenue is generated from data segment. He said the firm is offering good offers to attract more customers onto its network. For instance, the firm is currently offering weekly social bundles – SWIFT Whatsup, instagram, Facebook and twitter targeting the low-end market.
Other operators like MTN and Airtel also have data offers targeting the same market segment.
Last month, in an interview with The Independent, the outgoing Airtel Uganda Managing Director, Anwar Soussa said that the SIM card registration sales at their points-of-sale had declined by 20-30% because of the lack of IDs.
He said about 10% out of its 10 million customers had not yet been registered ahead of the SIM card switch off deadline.
Soussa said the company is heavily investing in data infrastructure to tap into the growing market and offer good quality work.
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To-date, the company has 1, 200 3G sites and is launching 4G internet soon in a bid to offer fast internet services which most of their clients want.
And like his Africell Uganda counterpart, Soussa remained guarded on the revenue performance but added that out of around 10 million customers hooked to Airtel network, about 40% are actively transacting on their mobile money platform and performing better compared with voice.
Indeed, data from Bank of Uganda and Ministry of Finance indicates that mobile money, which has been in existence for over eight years, has had tremendous impact on access to the delivery of financial services to the populace.
Starting at transaction values of Shs 490 million and offerings by one player – MTN – in March 2009, the service had by March 2017 grown to register transaction values of Shs 4. 9 trillion across eight telecom firms with MTN and Airtel dominating as main players.
By March 2017, annual growth rates in transaction volumes and registered users stood at 48% and 19% respectively, compared to 36% and -0.29% over the same period in the previous year.
Commenting on the growth of data and mobile money segments, Badru Ntege, the chairman of the East African Science and Technology Commission (EASTECO) and group CEO of consultancy firm, NFT, told The Independent on Aug. 10 that telecom companies have understood where the market is and are grabbing the opportunity pretty fast.
“The business always goes where the market is,” he said, “the market has moved…telecoms have to find new ways to survive; people are spending more time on skype calls, whatsup calls, recording whatsup messages and sending messages.”
He said telecom firms now need to do regular research on customer aspirations and serve them based on their need or risk losing customers to their rival networks.
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In terms of market opportunity, Ntege said that there is still room for more growth of the telecom sector given that the market is moving towards embracing internet-of-things, where more SIM cards and related service would be needed by a growing high-tech population to inter-connect devices like cars and home appliances.
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