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Getting unwired in East Africa

Explore the growth of mobile cellular services in East Africa, focusing on Uganda, Kenya, and Tanzania. Learn about partnerships, rural development, market structures, tariffs, and the impact on regional integration. Discover insights from strategic foreign investors and the importance of prepaid services in expanding access to telecommunications.

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Getting unwired in East Africa

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  1. Getting unwired in East Africa Michael Minges, ITU minges@itu.int The views expressed are those of the author and may not necessarily reflect the opinions of the ITU or its Members. PARTNERSHIPS & RURAL TELECOMMUNICATIONS DEVELOPMENT Kampala, Uganda 3-5 November 1999

  2. Mobile cellular in East Africa Uganda Start-up: 6/95 Subscribers: 26’000 Penetration: 0.15% Start-up: 1992 Subscribers: 7’300 Penetration: 0.02% Kenya Tanzania Start-up: 9/94 Subscribers: 38’000 Penetration: 0.12% Data at December 1998.

  3. Mobile growth 6x 50x Source: ITU.

  4. Substitution • Quick to implement • Low connection fee • Generally little wait for service • Functionality advantages Source:ITU.

  5. Strategic foreign investors Mobile Foreign Country 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.

  6. Prepaid • Provides access to those who might not normally qualify • Accounts for majority of new subscriptions • Operator avoids bad debt Source: MIC Tanzania.

  7. Extra revenue source Can help spur regional integration Not widely implemented Roaming agreements Tanzania (Tritel): 4 Uganda (MTN): 5 Kenya: 0 Note: No Tanzania-Uganda-Kenya roaming!!! Roaming

  8. 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

  9. Uganda Kenya    Tanzania  Market structure Cellular market structure • Private sector • Tanzania & Uganda • Kenya from 2000 • Competition • Tanzania since 1996 • Uganda since 10/98 • Kenya from 2000 Number of mobile operators in operation Number of mobile operators with license orto be licensed Source: ITU.

  10. Universal access obligations: Coverage MTN Uganda: Mobile cellular 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.

  11. 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.

  12. Competition in Uganda Source: ITU adapted from company information.

  13. Handsets • Factors affecting handset prices: • Custom duties • Distribution policy • Subsidies

  14. Forecast Fixed and mobile telephone subscribers (000s) Kenya Tanzania Uganda Source: ITU.

  15. 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

  16. 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

  17. “Mobile will substitute for fixed telephony as the primary form for personal communications” —Vodafone

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