Kampala - Uganda may be poised to lose some of its mobile-phone companies due to a “highly saturated” voice market that’s causing some operators to halt investment, according to the country’s industry leader, MTN.
About three wireless operators would be a more appropriate number than the current seven, Brian Gouldie, the chief executive officer of MTN Uganda, said on Tuesday in Kampala, the capital. More than 95 percent of the east African nation’s mobile-phone users have voice capability, he said.
“A number of players aren’t investing because they are concerned about the viability,” Gouldie, 52, said in an interview ahead of his return to MTN’s Johannesburg headquarters after two years in Uganda. “There will be consolidation.”
Gouldie’s comments come as mobile-phone companies reposition themselves in sub-Saharan Africa to tap potential for data-services growth even as voice revenue slides.
Read also: PIC backs new MTN boss
Vodafone Group made Uganda the first market for its high-speed wireless partnership with closely held Afrimax Group in 2014, while Orange SA is considering bids for units of Millicom International Cellular SA in Senegal, Ghana and Chad, people familiar with the matter said last month. MTN is the continent’s biggest provider with operations in 17 African countries.
Mobile banking
Data offers the potential for high growth in Uganda as a relatively low 13 percent of the population has access to internet services through smartphones, Gouldie said. MTN Uganda’s wireless financial-services sales gained 12 percent in the year through May as customers made payments through their mobiles, he said, and the company plans to introduce loans and savings accounts on same platform. Demand for mobile-payment services is higher where there’s a lack of banking infrastructure.
“We are changing the face of financial services,” Gouldie said. “MTN is working aggressively on a savings and loans proposition.”
Read also: MTN bets on mobile banking
MTN Uganda last month signed a $114 million syndicated loan from four banks for its investments in the country, he said. The company, which started operations in the East African nation in 1998, accounts for 52 percent of the market with about 9.8 million subscribers, Gouldie said. MTN had to disconnect 3.7 million customers in the country last year to comply with a regulatory order.
Other Ugandan operators include a unit of India’s Bharti Airtel and African operators Smile Communications and Africell.
BLOOMBERG