50% of population access Internet - new UCC report

   
Telecom and Internet service providers have registered an increase in demand for data services in the last quarter of 2020, Uganda Communications Commission (UCC) has said.

At least 20 million Internet subscriptions - nearly 50 per cent of the Ugandan population, is connected to broadband, the latest Communications market performance report of quarter three indicates.

According to UCC, this is the first time that total Internet subscriptions has crossed the 20 million mark, suggesting that nearly one in every two Ugandans has Internet access.

During the quarter under consideration, broadband cellular subscriptions also grew by 1.2m connections from 18.9 m at the end of June 2020 to 20.1m at the end of September. 

This is on the back of the disruption occasioned by the Covid-19 lockdown from March to June which shows significant recovery across major market segments highlighted in the quarterly market performance report.

“This growth is mainly attributed to the shifting work culture driven by the Covid-19 pandemic, which led many businesses to adopt remote working methods, says the report covering July – September 2020,” the report says.

There were also more than 1m new mobile subscriptions in the months of July, August and September 2020 as the market topped 26.5 million fixed and cellular subscriptions, equaling the pre-Covid-19 subscriber count of December 2019.

“Having dropped from 28.4 million in the first quarter (January – March 2020) to 25.4 million in the second quarter (April to June 2020), mobile subscriptions recovered to record 26.5 million at the end of September 2020,” the report indicates.

The sector posted a 3.3 per cent growth in subscriptions between September 2019 and September 2020, despite the 3 million subscriber erosion between March and June 2020 at the onset of the Covid-19 pandemic.

“Amid the disruption over the last six months, the sector averaged quarter-on-quarter growth rates of 1 per cent over the last 12 months. This comparatively subdued performance is largely attributed to the 11 per cent subscriber drop in the months April-June 2020,” the report stated. 

The current subscription figure translates into a national telephone penetration of 64 lines for every 100 Ugandans, according to UCC.

“At 1.8m newly registered accounts between June and September, mobile financial services led industry-wide product growth, jumping from 25.9m subscriptions at the end of June 2020 to 27.7m at the end of September 2020,” the report indicates.

Mobile money
UCC also says that Mobile money landscape continued to present a high conversion rate from registration to account activity.

 At the end of September 2020, at least 81 per cent of all registered money accounts had partaken in at least one billable mobile money transaction in the 90 days preceding September 30, 2020 which translates into a 7 per cent quarter on quarter growth in active wallets.

However, the report also points out that the growth in mobile financial services brought some challenges, with new consumers being susceptible to fraudulent schemes orchestrated by both unscrupulous individuals and agents.

A market research conducted by UCC and Innovation for Poverty Action in the period 2019/20, also showed that more than 40 per cent of customers surveyed reported a money-related consumer challenge. 

This ranged from agent overcharging, unclear or unexpected fees to incorrectly sending money. Moreover, 61 per cent of the consumers surveyed took no initiative to seek redress.
Renewed licences
During the quarter under review, MTN Uganda, having complied with the new licensing regime obligations, was successfully migrated and issued with a National Telecommunications Operator (NTO) license in July 2020.

This followed extended industry consultations towards revising the national telecommunications licensing regime in Uganda that led to UCC issuing a new licensing framework.

The new licensing regime introduces zonal licences, establishes new standards and obligations in network coverage, service uptime and quality. 

Challenges                           
At the end of September, 81 per cent of all registered money accounts had partaken in at least one billable mobile money transaction in the 90 days preceding September 30, 2020 which translates into a 7 per cent quarter on quarter growth in active wallets.
However, the growth in mobile financial services came with challenges with new consumers being susceptible to fraudulent schemes.