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Mobile Communications in Uganda

The mobile communications market has registered strong growth in recent years. There were about 9.5 million mobile subscribers in August 2009, an increase of 3.3 million from a year earlier, according to the Uganda Communications Commission (UCC). The number of overall minutes being used has also nearly doubled. The increase in subscriptions, along with substantial tariff discounts, resulted in a total of 6.6 billion minutes being billed during the FY 2008/2009, versus 3.5 billion minutes in the previous fiscal year.

Chart 1

The UCC attributes this market growth to the expansion of area service coverage and the introduction of new market competitors. Competitors are now offering a wider variety of services and plans along with cheaper introductory packages. There are now seven mobile phone service providers ranging in size and service capabilities. The first provider was Celtel (Zain Uganda) which began service in December 1994. The providers to follow were MTN Uganda in 1998 and Uganda Telecom in 2001. Orange and Warid Telecom entered in early 2008; I-Telecom debuted in September 2009 and targeted more affluent Ugandans with such offerings as mobile broadband internet and fast data services. [1] At the end of the FY 2008/2009, the UCC estimated that some 310,000 Ugandans have access to mobile phone.

Smile Telecom, which began providing mobile services in December 2009, targets low income Ugandans who may not be able to afford the cost of a handset. Smile gives customers their own telephone numbers and voice message boxes, and secure personal identification numbers to use on any Smile Communications phone. Customers can then make a call through company agents at street kiosks or stalls or at Smile pay phones.

According to AudienceScapes national surveys conducted in 2007 and 2008, household access to a mobile phone has increased some 18 percentage points from 21 percent of households to 39 percent. Similarly, the use of SMS text messaging and voice calls increased 16 percentage points and 15 percentage points, respectively see the chart below. Women, particularly, say a large boost in access more than doubling from 16 percent to 34 percent.

The decrease in cost and service expansion to more rural areas has also allowed Uganda's less affluent citizens to take advantage of the connectivity that mobile phones provide. Household access among Ugandans with a low-socioeconomic status (SES) tripled from 2007 to 2008 from 5 percent to 15 percent. Access among individuals with a lower middle-SES more than doubled from only 13 percent to 31 percent. Even so, high-SES Ugandans are more than twice as likely at 71 percent to have access to a mobile phone as those with a lower middle-SES.

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The survey has also shown that Ugandans are adept at gaining access to telephony other than using a personal mobile phone. Although 15 percent of low-SES individuals said they have household access to a mobile phone, 33 percent reported making a mobile phone call at least monthly. This is even a habit among high-SES users, as 71 percent have household access and 85 percent make a phone call at least monthly. Users may have borrowed a mobile phone from a friend or family member or visited a kiosk for a one-time use payment.

One study suggests that the large boost in mobile service coverage in 2007 and 2008 has also increased market participation in rural areas of Uganda. A study from the Japan Bank of International Cooperation found that information flows increased with mobile phone coverage expansion resulting in the cost of crop marketing decreasing, particularly for more perishable crops such as banana. In remote areas rural farmers of perishable goods were able to expand their participation in markets due to this expanded network coverage. You can find this Japan Bank study here.

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A number of mobile providers now offer mobile money transfers and the ability to “top up” the minutes of another user (an effective proxy for transferring money). In March 2009, MTN Uganda launched its mobile money transfer service, as did Zain with its Zap service in the summer. In addition Uganda Telecom announced a partnership in 2009 with Redknee Solutions to soon offer its own mobile transfer service. [2]

By October 2009, the MTN and Zain services together had signed up about 250,000 users; MTN said its service handled an average of sh6 billion transfers a month. [3] In addition to their domestic services, both MTN and Zain announced the launch of global money transfer services, allowing users to send and receive remittances outside of Uganda. [4]

There have been a number of development and social change projects seeking to capitalize on the communicative power of mobile phones. A recent venture between the NGO Text to Change (http://www.texttochange.com/) and the AIDS Information Centre of Uganda (http://www.aicug.org/) conducted a month-long program using SMS-text messaging in the district of Arua to inform and encourage the public to seek HIV counseling and testing services. TTC is a Dutch non-profit organization founded in 2006 that seeks to develop ICT systems to inform and educate about health issues. TTC is a complementary service provider using mobile telephony as a medium to communicate about health related issues to support (existing) health communication campaigns.

The TTC project tries to increase awareness about HIV/AIDS through information by using mobile phone SMS quizzes, with the aim of encouraging participants to use HIV Counseling and Testing (HCT) services. The project was designed to target 10,000 mobile subscribers from the West Nile region. Participants received interactive text messages in the form of multiple choice questions on their mobile phones. If answered correctly, a participant would automatically be guaranteed free HCT services and at the same time qualify to enter into weekly drawings for prizes such as mobile phones and airtime. The project also incorporated radio messages into its campaign as mobile phones users are often bombarded with promotions by fake or unlicensed companies. These radio messages, along with over 100 posters and flyers, worked to create buzz about the campaign and to deter people from disregarding the messages. According to the TTC, about 2,100 out of the 10,000 people who were sent an SMS-quiz completed the quiz. What's more, during the month of the campaign, the offices of the AIC saw a large increase in visitors. Another crucial lesson from the project was that such a campaign must be coupled with using other media formats such as radio messages, DJ mentions, and testimonies from those who have accessed the services offered. [5]

[1] Nshekanabo, Aggrey. “Sixth Telecom Lands in Uganda”. East African Business Week. 26 September 2009. Accessed January 2010. http://www.busiweek.com/index.php?option=com_content&task=view&id=2349&Itemid=34.

[2] Odomel, James. “UTL Partners with Redknee to offer transfer service”. New Vision. 25 February 2009. Kampala, Uganda. Accessed January 2010. http://www.newvision.co.ug/D/9/32/672639?highlight&q=redknee.

[3] Mugabe, David. “Telecom Money Transfer Tilts Market”. New Vision. 7 October 2009. Kampala, Uganda. Accessed January 2010. http://www.newvision.co.ug/D/9/32/697046?highlight&q=MTN transfer.

[4] Mugabe, David. “MTN to start global mobile money transfer”. New Vision. October 2009. Kampala, Uganda. Accessed January 2010. http://www.newvision.co.ug/D/9/32/697830?highlight&q=MTN transfer.

[5] “Report-Text to Change/AIDS Information Centre”. Text to Change. May 2009. Accessed January 2010. http://www.texttochange.com/AIC-TTC%20Arua.pdf.