Report Published: "Uganda Telecommunications Report Q2 2013"

New Fixed Networks market report from Business Monitor International: "Uganda Telecommunications Report Q2 2013"

[UKPRwire, Sat Apr 20 2013] The increase in competition in Uganda's mobile market following the arrival of Sure Telecom and K2 Telecom is expected to boost subscriptions and deepen penetration rate through network expansion and aggressive promotional strategies. However, this further fragmentation of the market will further squeeze operators' margins and make the market less attractive for expensive capital investments. It also increases the likelihood for consolidation in the future as we do not believe the market is capable of supporting seven active players over the long term.

Key Data

* The mobile market grew by 8% in 9M12, driven by strong net additions by second-ranked Airtel.
* Mobile ARPU remained below US$4 in Q312 despite an uptick in mobile data subscriptions.
* The fixed-line market grew by 42.2% in 2011.

Risk/Reward Ratings

Uganda climbed four places to 15th position in BMI's Q213 RRR table due to upgrades in its industry rewards and country risks scores. However, the country's aggregate score, at 38.6, remains below the regional average of 41.3. Uganda's highest score is in the country risks category, which reflects a positive real private consumption growth outlook during our forecast period.

Full Report Details at

Key Trends & Developments

Sure Telecom announced it had tested its first GSM call in early December 2012. The operator is owned by Cyprus-based Timeturn Holdings, which has operations in Asia and Africa. This was followed by the launch of commercial services by K2 Telecom, partly owned by Buganda Kingdom, on December 31. At only 50% penetration at the end of 2012, there are clearly major opportunities for growth in Uganda. This would suggest ample room for the new operators in the market, capturing the growth potential and possibly driving growth through increased competition. However, BMI notes that Uganda's mobile market offers very low ARPUs even on a regional scale. We believe there is very little room for competition to force prices lower without causing significant damage to operator bottom lines. MTN is the only operator to report ARPUs and the Q312 figure was US$3.86, up from the low of US$3.40 in Q211, but still one of the regional player's lowest figures across its operations. Until Q411, Uganda gave MTN its lowest ARPU.

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