Getting unwired in East Africa
Michael Minges, [email protected] 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
Kenya
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.
Partnerships & Rural Telecoms, Kampala, November ‘99
Source: ITU.
Mobile growth
0
1
2
3
4
5
6
1996 1997 1998
Telephones per 1'000 people, East Africa *
* Kenya, Tanzania and Uganda
Mobile
Fixed
05
101520253035404550
1996 1997 1998
MobileFixed
New telephone subscribers, East Africa (000s) *
* Kenya, Tanzania and Uganda
50x 6x
Partnerships & Rural Telecoms, Kampala, November ‘99
Source:ITU.
Substitution
Quick to implement Low connection fee Generally little wait
for service Functionality
advantages
3
24
35
Kenya
Tanzania
Uganda
Mobile cellular as % of total telephone subscribers, 1998
Partnerships & Rural Telecoms, Kampala, November ‘99
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.
Partnerships & Rural Telecoms, Kampala, November ‘99
Source: MIC Tanzania.
Prepaid
Provides access to those who might not normally qualify
Accounts for majority of new subscriptions
Operator avoids bad debt
3
1114
25 30
79%72%
0%
18%
42%
54%
J un-98
Sep-98
Dec-98
Mar-99
J un-99
Sep-99
MIC TanzaniaPrepaid subscribers, 000s
As % of total cellular subscribers
Partnerships & Rural Telecoms, Kampala, November ‘99
Roaming
Extra revenue source Can help spur
regional integration
Not widely implemented
Roaming agreementsTanzania (Tritel): 4Uganda (MTN): 5Kenya: 0Note: No Tanzania-Uganda-
Kenya roaming!!!
Partnerships & Rural Telecoms, Kampala, November ‘99
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
Partnerships & Rural Telecoms, Kampala, November ‘99
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
Kenya
Tanzania
Uganda
Number of mobile operators
in operation
Partnerships & Rural Telecoms, Kampala, November ‘99
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
Partnerships & Rural Telecoms, Kampala, November ‘99
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.
$41
$51
$33
Kenya
Tanzania
Uganda
Mobile cellular tariffs, 100 minutes, US$, '99
6.6
6.5
1.5
TimesFixedTariff
Partnerships & Rural Telecoms, Kampala, November ‘99
Competition in Uganda
Source: ITU adapted from company information.
Cellular subscribers in Uganda
0
10'000
20'000
30'000
40'000
50'000
60'000
70'000
80'000
1995
1996
1997
1998
'9/9
9
MTN
CelTel
Forecast
Forecast
0
10
20
30
40
50
60
70
80
90
1996 1999
CelTel Mobile Tariffs100 minutes per month US$
Partnerships & Rural Telecoms, Kampala, November ‘99
Handsets
Factors affecting handset prices:– Custom duties– Distribution policy– Subsidies
Partnerships & Rural Telecoms, Kampala, November ‘99
Forecast
Source: ITU.
0
50
100
150
200
250
300
350
400
450
91 94 97 00 03
Fixed
Mobile
0
50
100
150
200
250
93 96 99 2 5
0
50
100
150
200
250
94 97 0 3
Fixed and mobile telephone subscribers (000s)
Kenya Tanzania Uganda
Partnerships & Rural Telecoms, Kampala, November ‘99
Conclusions
Mobile cellular enhances access to communications
Must not be viewed as service for privileged
Requires regulatory encouragement to extend access to all
©ITU / A. de Ferron
Partnerships & Rural Telecoms, Kampala, November ‘99
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
