Uganda telecoms have lowest revenue per user in EA - report

Telecoms

Telecommunication companies in Uganda have the lowest Average Revenue Per User (ARPU) compared to their counterparts in the region, a Deloitte study shows.

The Technology, Media and Telecom (TMT) Predictions 2014: Highlights and context report indicates that while Kenya’s ARPU was $6.2 (Shs15,020) last year and $4.4 (Shs10,660) for Tanzania, Ugandans spent only $3.5 (Shs8,479) on average on airtime.

Kenya’s ARPU is expected to rise to $6.5 (Shs15,747) this year, $3.7 (Shs8,964) for Uganda while Tanzania’s is expected to remain unchanged at $4.4 (Shs10,660) this year. This means that majority of mobile phone users in Uganda are low-end subscribers, whose propensity to spend on mobile value added solutions is low; thereby depressing the effective rate of revenue realisation per minute for the operators.

Low ARPU means that the Kenyan and Tanzanian telecom markets are more profitable than the Ugandan market. MTN Uganda chief marketing officer Ernst Fonternel attributed the low ARPU in Uganda to a high multi-SIM market which dilutes revenue per user, low consumer spending power, low retail pricing due to competition and price wars and slow uptake of data services due to affordability of data handsets which results into limited contribution of mobile data to the overall revenue.

“In a highly competitive market like Uganda where one individual has more than a single SIM card, it dilutes revenue per user that users on a given network, even if overall revenue from that user across all networks is higher,” Fonternel told Daily Monitor in an email exchange.

It is said that 57 per cent of mobile service subscribers have more than a single SIM.

Andrew Kiyingi , Manager Technology Advisory Services, Deloitte said the availability of cheaper smartphones in Uganda will help boost internet usage in the country, which currently grows at a slower pace.