MTN Ugandas dominant position in the telecommunications sector during the ten years of its operations in Uganda has led to rapid changes in the industry with the introduction of cutting-edge innovations and cut-throat competition among the key players.p>MTN Ugandas dominant position in the telecommunications sector during the ten years of its operations in Uganda has led to rapid changes in the industry with the introduction of cutting-edge innovations and cut-throat competition among the key players.
The company, which has been voted for the last three consecutive years as the most respected telecommunication company in Uganda, still retains its edge in the telecommunication sector in the country where it holds over 65 per cent of the total market share for both fixed and mobile phone services.
The company says taht in August this year, its cellular phone subscribers hit three million and thenumber is expected to reach 3.5mn by the end of December 2008 despite a stiff challenge from other service providers like Uganda Telecom Limited (UTL) and Zain, formerly Celtel and Warid, a new entrant on the local market.
"The current situation is a big improvement from 1998 when mobile telephony was hardly significant with only one operator to choose from, but over the ten years, MTN Uganda has demonstrated that innovative solutions in the cellular and technological industries boost one's brand," a company official was recently reported as saying.
Reaching out to customers
According to the company's Chief Commercial Officer, Eric Van Veen, MTN Uganda has continued to accelerate at a phenomenal rate and had reached its five-year forecast of 125,000 customers within 18 months while it took them seven years to reach the one million customers mark.
"Reaching the two million mark took just one and half years and our third million customers took just a year," Van Veen recounts while celebrating ten years since they entered the Ugandan telecommunication market. He added that in 1998 they launched with 24 base stations and in the first few years, they would typically roll-out 20 to 30 new base stations per year.
The official notes that "Uganda is also seen as a market with substantial growth potential and, as such, MTN Group are focused on ensuring that the company is sufficiently funded and supported so that we are able to invest the required infrastructure needed to maximise the potential."
He adds that the company's market share between 2000 and 2003 was unrealistically high - in excess of 70 per cent - and says that holding such a dominant market share wasn't health for the industry.
"As a market leader,we realise that we have an inherent responsibility to ensure a thriving and growing telecoms market and that situation has normalised as the number of competitors has increased,” he notes.
"The market share has over the last five years oscillated around 60 percent depending on cyclical market conditions and naturally, we appreciate that we may have to shed some market share in the future to accomodate new entrants in the telecoms market"
Mr Van Veen adds that since MTN Uganda supplies 60 per cent of the telecom services in Uganda, its contribution to the country's economy is sizeable and has ensured Uganda has not been left on the wrong side of the digital divide.
Uganda Communications Commission (UCC) says, following a review of the Ugandan telecommunications sector over the past ten years, that an estimated $300mn in tax contributions by the telecommunication companies has been paid, and another $850mn has been invested in
post and telecommunications infrastructures.
Investing in infrastructure
The Executive Director of UCC, Patrick Masambu, says investment expenditure has largely been in upgrading of switching systems,expansion of geographical coverage, local capacity building, site acquisition and software upgrades.
He adds that there has been 100 per cent digitalisation of switching and transmission systems.
"We have had 85 per cent geographic coverage at the end of June 2008 from a network presence that had been largely limited to a few towns and cities in 1997.
The growth in national switching capacity has risen to 9.5mn from less than 500,000 switches at the end of 1997," he says.
Geoffrey Muleme
