Uganda: Data is Revenue Source of the Future for Telecoms


Internet service providers are forecasting that data will be a major source of future revenue and a main enabler of the economy besides voice.

Telecom giant MTN forecasts that by 2011, data sales contribution to its overall revenue will rise to 10%, from the current 4%, largely driven by penetration of the lower-end market.

"Initially, it was to avail services to the high-end market, but with the advent of 3G, data can now be availed to every Ugandan," said Themba Khumalo, the chief executive, on the sidelines of telecoms Africa Com conference in Cape Town, South Africa.

The 10% revenue target could not immediately be equated in monetary terms.

According to Khumalo, the plug-in device, the dongle, is witnessing the fastest growth alongside mobile Internet for individual users with enabled mobile devices.

The growth of mobile data, according to experts, is partly driven by Uganda's appealing demographics, which are attracting global brands like Google and Microsoft.

Earlier this year, Google held a two-day web and mobile conference as it sought entry into this market.

Choosing Uganda, according to Dr. Julie Taylor, Google's communications officer for sub-Saharan Africa, was due to the country's stability, growth and young, educated population that fits well with Google's plan.

Global experts believe Africa can leap past the broadband generation and exceed the rest of the world in the new mobile Internet generation, which is viewed as the future of the global economic platform.

"But access barriers must be addressed. Without that, Africa will never have a large number of Internet users because developers need several people to use their products, which is an incentive," said Nelson Mattos, the Google vice-president for Europe, Middle East and Africa, recently.

Provision of data has been boosted by the landing of the undersea fibre optic cables on East Africa's coast, enhancing the availability of bandwidth capacity and, to some extent, lowering prices.

Sector players expect the prices to drop further once most operators and service providers stop relying on the expensive satellite back up system.

"Once we have sufficient resilience on the cables on the ground and one cable is down, we get the other. That means we switch off the satellite and rely fully on cable. When we reach there, there will be major uptake."

The low penetration of data is also attributed to the high prices of Internet-enabled handsets. The industry is still struggling with a 30% tax on hand-held devices, which operators say is a stranglehold on voice mobile and data penetration.