No mobile number portability for Ugandans — for now

June 19, 2009

Following the entry of a fifth operator in the Ugandan mobile market — Orange Uganda — the country’s regulator has been facing increasing pressure from the two youngest operators, Warid Telecom and Orange, to introduce mobile number portability. Since MNP would let subscribers transfer their assigned mobile numbers from one operator to another, Orange and Warid stand to capture some of the older operators’ customers.

Patrick Masambu, executive director of the Uganda Communications Commission (UCC), has announced that MNP has been postponed until the number of mobile subscribers is higher, mentioning 10m as a level where MNP would make sense. “At this stage, number portability is not something we see as a remedy in this market,” Masambu said. The decision is based on a feasibility study that is outdated, however: It was done when there were only 3m mobile subscribers in Uganda. But at year-end 2008 the number had reached 8.7m, and in our Uganda Country Intelligence Report  we project that it will grow by more than 30% to reach almost 13m subscribers by the end of 2009. This is much higher than the 10m level required by the UCC (see exhibit below).

With a population of 33m and mobile subscription penetration of 27.2% of the population at year-end 2008, Uganda is a very attractive market for mobile operators. Hence it is not surprising that the established operators — Uganda Telecom, MTN Uganda and Zain Uganda, which already have large customer bases — do not seem overly eager for MNP. The entry of Warid in 2008 raised the level of competition in the Ugandan market, putting downward pressure on tariffs and spurring operators to introduce more value-added services so as to gain more customers. MNP would only intensify this fight, shifting much of the battle from attracting new mobile subscribers to keeping existing customers. And by making it easier for customers to churn, MNP would force the operators to improve their services, both in terms of service quality and price.

If the UCC keeps its promise and reevaluates the viability of MNP when the subscriber base reaches 10m, Ugandans might be able to change mobile operators without changing their number sooner than they thought.

— Sylwia Boguszewska, Analyst

Related resources:

Communications Markets in Uganda
Country Intelligence Report published April 2009
The Ugandan telecom market generated $0.6bn in service revenue in 2008 and will grow to $0.7bn in 2009, a 19% year-on-year increase. The bulk of revenue came from mobile services. The fastest growth segments will be fixed broadband Internet, dial-up Internet and mobile data. This Country Intelligence Report analyzes Uganda’s communications, media and technology industries, including key trends, regulatory pressures and the competitive landscape, making it an excellent complement to our Forecast products.

Africa & Middle East Mobile Operator KPI Forecasts
Forecasts updated quarterly
Our Mobile Operator Key Performance Indicators Forecast products provide a complete picture of wireline voice and data communications in each of 25 African & Middle Eastern markets. The Excel output includes five years of historical data and five years of market projections for metrics such as subscription totals, market shares, net and gross additions, prepaid and postpaid subscriptions, business subscriptions, data ARPS, aggregate ARPS, prepaid and postpaid MOU, churn and total service revenue — all broken down for the mobile operators in the respective markets. We believe our Mobile Operator KPI Forecasts are superior because they capture granular data gathered through extensive field research and use a thorough methodology consistently applied to all markets.

Africa & Middle East Mobile Demand Forecasts
Forecasts updated quarterly
Our Mobile Demand Forecast products provide complete pictures of demand trends for 59 geographical markets in Africa & Middle East. The Excel output includes five years of historical data and five years of market projections for metrics such as GDP, mobile penetration, subscriptions (by operator, type of package, technology), ARPS and total mobile service revenue (data and voice). The Forecasts are based on extensive field research and use a consistent methodology across all markets, aiming to capture the total spending, from an end-user perspective, on mobile communication services in each market.

Mobile Financial Services in Africa: The Business Case for Operators and Banks
Research Report published January 2009
The use of mobile devices to pay for goods and services has been held back in most markets, but mobile payments are having a more penetrating impact in poorer economies than in mature ones, with market dynamics that are starkly different, especially in Africa. In this context, new business models have emerged that are transforming the financial landscape in developing countries. This report reviews and analyzes mobile financial services offerings in African markets, looks at drivers and obstacles to mobile financial services, breaks down business models to assess their true bottom-line impact, and provides market projections based on intrinsic market dynamics.