Getting unwired in East Africa Michael Minges, ITU minges@itu.int The views expressed are those of...

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Getting unwired in East Africa

Michael Minges, ITUminges@itu.intThe views expressed are those of the author and may not necessarily reflect the opinions of the ITU or its Members.

PARTNERSHIPS & RURALTELECOMMUNICATIONS DEVELOPMENTKampala, Uganda 3-5 November 1999

Partnerships & Rural Telecoms, Kampala, November ‘99

Mobile cellular in East Africa

Tanzania

UgandaStart-up: 6/95Subscribers: 26’000Penetration: 0.15%

Start-up: 9/94Subscribers: 38’000Penetration: 0.12%

Start-up: 1992Subscribers: 7’300Penetration: 0.02%

Data at December 1998.

Source: ITU.

Mobile growth

1996 1997 1998

Telephones per 1'000 people, East Africa *

* Kenya, Tanzania and Uganda

Mobile

101520253035404550

1996 1997 1998

MobileFixed

New telephone subscribers, East Africa (000s) *

* Kenya, Tanzania and Uganda

50x 6x

Source:ITU.

Substitution

Quick to implement Low connection fee Generally little wait

for service Functionality

advantages

Tanzania

Uganda

Mobile cellular as % of total telephone subscribers, 1998

Strategic foreign investors

Mobile ForeignCountry Operator Investor Share

Tanzania MIC Millicom (Luxembourg) 57%

TriTel TRI (Malaysia) 60%

Uganda CelTel Vodafone (UK) 37%

MTN MTN (South Africa) 50%

Telia (Sweden) 30%

Source: ITU.

Source: MIC Tanzania.

Prepaid

Provides access to those who might not normally qualify

Accounts for majority of new subscriptions

Operator avoids bad debt

79%72%

J un-98

Sep-98

Dec-98

Mar-99

J un-99

Sep-99

MIC TanzaniaPrepaid subscribers, 000s

As % of total cellular subscribers

Roaming

Extra revenue source Can help spur

regional integration

Not widely implemented

Roaming agreementsTanzania (Tritel): 4Uganda (MTN): 5Kenya: 0Note: No Tanzania-Uganda-

Kenya roaming!!!

Mobile cellular licenses

How many– How many operators can market bear?

How long– Time period of license

How much– License fees will be passed on to consumers

How about– Coverage obligations– Technology– Scope

Market structure

Private sector– Tanzania & Uganda– Kenya from 2000

Competition– Tanzania since 1996– Uganda since 10/98– Kenya from 2000

Cellular market structure

Source: ITU.

Numberof mobileoperators

withlicense or

to be licensed

Tanzania

Uganda

Number of mobile operators

in operation

Universal access obligations: Coverage Coverage typically

limited to major towns

Licenses should be linked to coverage targets

Global mobile satellites may help

Source: ITU adapted from GSM Association.

MTN Uganda: Mobile cellular coverage

Tariffs

Still high relative to fixed and compared to other regions

Biggest barrier to mobile access

Reasons why– “High retention”– Interconnect charges– Handset & service

provider subsidies

Cost based tariff: US$ 15/month

Source: ITU adapted from published operator tariffs.

Tanzania

Uganda

Mobile cellular tariffs, 100 minutes, US$, '99

TimesFixedTariff

Competition in Uganda

Source: ITU adapted from company information.

Cellular subscribers in Uganda

10'000

20'000

30'000

40'000

50'000

60'000

70'000

80'000

CelTel

Forecast

1996 1999

CelTel Mobile Tariffs100 minutes per month US$

Handsets

Factors affecting handset prices:– Custom duties– Distribution policy– Subsidies

Forecast

Source: ITU.

91 94 97 00 03

Mobile

93 96 99 2 5

94 97 0 3

Fixed and mobile telephone subscribers (000s)

Kenya Tanzania Uganda

Conclusions

Mobile cellular enhances access to communications

Must not be viewed as service for privileged

Requires regulatory encouragement to extend access to all

World Telecommunication Development Report 1999

Theme: Mobile cellular

Publication launch: TELECOM ‘99

Available on paper and PDF

Website:www.itu.int/ti/

publications/wtdr_99/wtdr99.htm

Getting unwired in East Africa Michael Minges, ITU minges@itu.int The views expressed are those of...

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