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Liberalisation set to drive Ugandan mobile sector

Mobile penetration expected to reach 70% by 2014 according to report from Pyramid Research

Mobile penetration in Uganda is expected to reach more than 70% by 2014, up from 39% in 2009, as liberalisation of the sector and increased competition drive growth, according to a report from US-based analyst Pyramid Research.

Although Uganda is one of the smallest markets in the region, it is also one of the fastest growing markets in Africa and the Middle East, according to Sylwia Boguszewska, analyst at Pyramid Research.

In the next five years, Pyramid expects Uganda to experience the second highest percentage increase of mobile subscriptions among the African countries, after Cameroon.

“Mobile penetration rose from just 1.9% at year-end 2002 to an estimated 39% in 2009,” said Boguszewska. “Pyramid expects it will increase further to reach 70.7% penetration by 2014, while the number of mobile subscriptions will exceed 27 million.”

Uganda now has five mobile operators, three of which are well-established: MTN Uganda, Uganda Telecom, and Zain Uganda. They were joined by Warid Telecom, which entered the market in February 2008, and Orange Uganda, which launched in March 2009, according to Boguszewska.

Another mobile operator, Anupam, is due to enter soon, increasing the number of mobile operators to six.

Increased competition is driving down prices, with new entrant Warid being particularly aggressive to attract subscribers, while MTN’s Zone pricing scheme has also attracted customers, Boguszewska said.

“Last year, the three mobile operators – MTN Uganda, UTL, and Zain – commanded 85% of mobile market subscribers, while Warid Telecom, despite its late entry in 2008, managed to gain a significant 15% market share,” she added.

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