Uganda’s telecom sector is attracting a number of players, the latest being Afrimax, which has signed a deal with Vodafone to extend its reach. The implementation director spoke to GAAKI KIGAMBO on the firm’s game plan in a market that appears saturated.

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What has attracted you to a market that has almost achieved maturity levels?

The Ugandan market is not yet mature. As at the end of Q1 2014, total mobile and fixed telephony subscriptions stood at 19.2 million, translating into a tele-density of about 52.4 per cent. Between Q4 2013 and Q1 2014, there were 800,000 new subscriptions.

This is not reflective of a market that is saturated. We believe there is room for growth if we are to compare Uganda with our neighbours in Tanzania and Kenya where the tele-density is about 60 per cent and 80 per cent respectively.

Recent population statistics show that one million Ugandans turn 18 every year, and we have also seen a declining trend in poverty figures, with a corresponding increase in household expenditure. We believe these are positive trends that will drive sustained growth in the telecoms sector.

Equally, there is potential in the data market as seen in the 11.5 per cent rise in Internet users from 7.3 million to 8.15 million between Q4 2013 and Q1 2014.

Telecoms are afflicted by poor quality services, according to the regulator. The operators say some of the challenges are beyond their control. What will you do differently under such circumstances? 

We hope to leverage Vodafone’s years of time-tested products that have worked elsewhere. We shall offer exceptional customer service, affordable high quality data devices and worry-free solutions to consistently deliver on this promise. 

We have invested in infrastructure, strategic partners, human resources, systems and processes to deliver on our promise.
However, the delivery of quality service sometimes goes beyond the telecommunications operators; it must also be discussed in light of an enabling environment by involving more stakeholders. 

For example, the latest Uganda Communications Commission Quality of Service report shows that at least 40 per cent of network failures are attributed to fibre cable cuts, battery and fuel thefts.

Telecoms that have set up after MTN have failed to unlock its grip on the market. How do you intend to establish a footprint in such a market?

Our intention in this market is not necessarily to dislodge any player. We are about empowering people to be confidently connected so that their lives are simpler, richer and more rewarding.

We believe that there is still room in the market for a reliable, affordable and trusted provider and Vodafone is that provider. With 30 years’ experience in 80 countries serving more than 400 million people, we believe in Uganda we have invested in the right technology, the right people and the right solutions for the market.  

It is said that the future of the telecom sector lies in data. But Internet speeds are still slow and costs remain high. What needs to be done to improve on this?

Improvements in speed and reduction in costs can only happen if the issues of access, adoption and competition are addressed in tandem.  The availability of reliable and reasonably priced broadband Internet access is a key determinant in foreign direct investment decisions. 

Low-cost and high-quality broadband reduces transaction costs and enables flexible firm locations.  Access to affordable communication, especially Internet, is no longer a matter of business alone but rather everyone’s concern including the government. 

The telecoms players have made a good head-start in making infrastructure investments. We now have access to a number of under sea fibre-optic cables and internally, the industry has laid over 5,000 kilometres of fibre optic cables. Public-private partnerships could play a key role in accelerating deployment of infrastructure.

Consumer use of broadband Internet is continuously evolving and to satisfy increasing and diversified demand for services and applications, various fixed and mobile broadband technologies can be deployed to meet these demands.

The deployment of different technology options has implications in terms of network costs, speed and quality available to the customer; and, particularly important for a developing country are consumer prices. 

There is a need for consumer education in order to familiarise the market with the available options and how to use them for maximum benefit for individuals, businesses and the community. This boosts the adoption of broadband Internet and where there is demand and a vibrant competitive environment, prices will become more attractive.

Anecdotal evidence suggests most data usage on mobile devices is linked to social media platforms like Facebook, WhatsApp and Twitter. What do you see as the role of telecoms in driving usage beyond social media platforms?

Social media has grown beyond just being a place for chit-chat to being a marketplace for ideas, services and goods. In Uganda, like elsewhere in the world, we are beginning to see a number of entrepreneurs leveraging social media to meet and engage consumers, resolve client complaints etc.

We have also seen a number of e-commerce platforms emerge. We will be investing much more of our time in engaging with the market on what the Vodafone connectivity can do for them, their families, their businesses, their communities etc. 

Another growth segment is mobile money and related financial services. What is your view on this segment and what opportunities does it provide for a new entrant like Afrimax?

Mobile money has just completed its first phase of growth. The next phase is to progress to mobile money-based borrowing, as is happening in Kenya as well as having mobile-money powered online payments.

The opportunities for innovation are numerous. Vodafone, through Safaricom, is a leader in the mobile money business, so when we fully roll out, the market should expect some interesting products and services from us.