Social media, internet shutdown cost telecoms Shs20b - UCC report

Wednesday July 21 2021

In January government imposed a five-day internet shutdown, causing losses in a number of sectors, among them telecoms. PHOTO | file

By Dorothy Nakaweesi

Telecoms were some of the biggest victims as government shutdown the internet and social media sites over alleged plans to disrupt the January general elections. 
The details are contained in the Uganda Communications Commission (UCC) Market Performance report in which the telecommunications sector during the first 2021 for the quarter ending March, registered a Shs20b fall in revenue compared to the 2020 fourth quarter.

The fall, apart from the total internet shut down, was also attributed to blockades placed on social networking sites and economic-related volatilities. 
Government blocked social networking sites in January but only lifted the ban off WhatsApp, maintaining the one on Facebook to-date. 

According to the report, UCC indicated that quarter-on-quarter revenues dropped from Shs1.14 trillion in the 2020 fourth quarter to Shs1.12 trillion in the period under review.  
However, the performance indicates that the telecom sector remains one of the few sectors of the economy that are registering some good performance amid a number of disruptions. 
The report also noted that the telecom sector had during the period seen an increase in revenue earning customers, which grew by 590,000 Simcards to 28.3m from 27.7m in December 2020.
Mr Ibrahim Bbosa, the UCC spokesperson, said the decline was due to restrictions on social networking sites, noting this “affected telecom revenue streams such as data”.  
On January 12, in a televised address, President Museveni said government would shut down some social media networks such as Facebook after several government-linked accounts were deleted from both Twitter and Facebook. 
The accounts had been closed for alleged breach and manipulation of election debates and results. 
However, government on January 13 imposed a total internet shutdown, which went on for at least five days, causing losses in different sectors of the economy, among them banking, telecom and trade. 
In January, Mr Peter Kawumi, the Financial Technology and Service Providers Association chairman, a lose association of financial technology companies, told Daily Monitor they were losing at least Shs66.6b on a daily basis following disruption of member services. 
More than 300 million transactions, conducted through Fintechs on a daily basis, he said, had been disrupted due to the shutdown. 

However, Mr Bbosa also noted that the drop in revenue could have resulted from a clean-up of telecom registers in which more than 10 million mobile money accounts were cleaned off the telecoms’ networks. 
The clean-up saw active mobile money accounts drop to 20.3 million as of March 2021 from 22.5 million in December, which represents at least 66 per cent of the 30.5 million registered mobile money accounts.

Mobile money and agency banking  

During the period, the UCC report indicated, mobile money agent access points had grown by 8 per cent from 235,790 at the end of December 2020 to 254,930 as of March 2021 with a number of mobile money agents adding agency banking services to their service portfolio.