post, broadcasting and telecommunications market ... · a) increasing 4g and 3g coverage b)...

Post, Broadcasting and

Telecommunications Market &

Industry Q3 Report, 2017

THIRD QUARTER (JULY-SEPTEMBER 2017)

Legal Disclaimer The information and figures contained herein were obtained from licensees’ submissions to the

Commission and other sources available to the Commission. It is intended to provide an overview

of the industry performance to the stakeholders. UCC does not give any warranty and may not be

liable for any loss or damage arising from its use or misuse.


Introduction

This report is a summary of the analysis done on the market and industry data

largely extracted from the operational reports of licensees in Uganda’s

Communications Industry for the period July to September 2017.

The information derived from the market and industry data covers the following

key aspects of the communications sector:


National Telephony

Mobile Telephony

Fixed Telephony

Tele-density

Traffic Growth

Communications Infrastructure

Internet/data Services

Tariffs

Broadcasting

Postal Services

Tax revenue contributions of

the communications sector

Mobile money services

Consumer Affairs

Telecommunications


National TelephonyIn this quarter, the total mobile

and fixed telephony

subscriptions increased from

23,993,111 in the previous

quarter to 24,625,514 in the

current quarter, bringing on

board 632,401 new

subscribers (2.6%). This

growth is mainly attributed to

new mobile subscriptions.


As ofDec2016

As ofMarch2017

As ofJune2017

As ofSept2017

National Telephony 23,206,729 24,034,793 23,993,113 24,625,514

22,000,000

22,500,000

23,000,000

23,500,000

24,000,000

24,500,000

25,000,000

Su

bsc

rip

tio

n

Mobile Subscriptions

752,941 new mobile

subscriptions were realized in

the this quarter.

This translates into a quarter

to quarter growth of 3.2%

compared to the drop of -

0.3% realized in the preceding

quarter.

Subsequently, the cellular

penetration rose to 65.4% lines

per 100 persons from 63.7%

lines per 100 registered in the

previous quarter.


20,500,000

21,000,000

21,500,000

22,000,000

22,500,000

23,000,000

23,500,000

24,000,000

24,500,000

Sep-16 Dec-16 Mar-17 Jun-17 Sep-17

21,996,444

22,838,486

23,665,556 23,608,610

24,361,551

Mobile Subscribers, Sept 2017

Fixed Telephony Market

Fixed Subscriptions

There has been a decline in the

fixed line segment as a proportion

of telecommunication connections

reflecting a percentage loss of

31.4%.

This large drop is accredited to the

growing popularity of Value Added

Services (VAS) and Over the Top

(OTT) services that are available to

mobile telephony subscribers.

The drop has resulted into a

national fixed line penetration of

7.0 lines per 100 inhabitants.



365,698 368,243 369,237 384,503

263,963

Year on year Fixed Telephony Subscriptions

Fixed line Distribution

The fixed line market is

predominantly in the form of

fixed GSM, CDMA, Fiber,

Wimax and Wireless local loop

terminals.

By the end of September 2017,

GSMA fixed cellular terminals

accounted for 98% of the total

fixed lines.


Fiber0%

CDMA-fixed1%

WLL0%

GSM -fixed98%

Wimax1%

Fixed line distribution, Sept 2017

Fiber CDMA-fixed WLL GSM -fixed Wimax

Telephone Subscriptions and Penetration

Worth to note is the fact that mobile penetration has continued to

grow over the past quarters, however, the growth pace had been

slow due to the small quarter on quarter percentage changes.



fixed & mobile subs 22,362,142 23,206,729 24,034,793 23,993,113 24,625,514

Teledensity 61.1 63.4 63.8 63.7 65.4

61.1

63.463.8 63.7

65.4

58.0

59.0

60.0

61.0

62.0

63.0

64.0

65.0

66.0

21,000,000

21,500,000

22,000,000

22,500,000

23,000,000

23,500,000

24,000,000

24,500,000

25,000,000

The Mobile Market Competitiveness [The Herfindahl-Hirschman

index (HHI)]

The (HHI) is a commonly accepted measure of market

concentration/competitiveness. It is calculated by squaring the market share of

each firm competing in a market, and then summing the resulting numbers, and

can range from close to zero to 10,000.

It is an indicator of the amount of competition among the firms in the Industry.

Increases in the HHI generally indicate a decrease in competition and an

increase of market power, whereas decreases in HHI indicate the opposite.

The closer a market is to being a monopoly, the higher the market

concentration and the lower its competition.

In the case of mobile subscription, the downward trend in the next slide implies

decreasing mobile market concentration, reducing market power hence

increasing mobile market competition. In other words, the trend explains that

the mobile market is moving away from a monopoly tendency to a more

competitive market environment.


Mobile Market HHI, Based on subscriptions, Onnet,

Offnet and International Out Traffic


4Q16 1Q17 2Q17 3Q17

Subscriptions 4,109.5 4,068.0 4,064.6 4,003.9

on net 4,332.5 4,406.9 4,367.5 4,308.4

off net 4,180.8 4,235.9 4,339.0 4,444.4

int out 4,377.9 4,529.7 4,480.7 4,462.2

3,700.0

3,800.0

3,900.0

4,000.0

4,100.0

4,200.0

4,300.0

4,400.0

4,500.0

4,600.0

SMS Traffic

-

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1,400,000,000

1,600,000,000

4Q16 1Q17 2Q17 3Q17

Onnet Sms 1,197,065,579 1,207,976,859 1,012,684,939 1,557,364,152

Off net Sms 25,762,437 23,240,984 20,311,965 20,972,939

Int'nal Out 3,832,783 3,909,315 3,601,890 3,695,974

Incoming Intn'l SMS 18,168,221 22,296,239 13,203,520 16,309,013

Quarterly SMS Traffic Growth, Sept 2017 53% growth in onnet

SMS volume.

3.3% growth in off net

SMS volume.

2.6% growth in int’l SMS

volume

24% growth in incoming

Int’l SMS volume


Voice Traffic Trends In the third quarter, the

industry recorded a total of 7.2

billion minutes from 6.7 billion

minutes recorded in the

previous quarter.

This translates to a 6.4%

increase in domestic and

outgoing international traffic

for fixed and mobile voice

services.

On net traffic still accounts for

the lions share of domestic

traffic at 96.7% reflecting the

current pricing structure.


1Q17 2Q17 3Q17

6,461,542,274 6,545,087,345

6,985,029,573

212,177,376 190,060,083 185,094,465

60,541,730 54,651,081 53,769,147

Telephone Traffic1Q17- 3Q17

On net Off net Intnl Outgoing

Share of Traffic Distribution (%)


97%

2% 1%

Voice Traffic Distribution, Sept 17


97%

2% 1%

Voice Traffic Distribution, June 17


International Incoming Traffic

During the period under review,

the international incoming traffic

increased to 117 million minutes

from 113 million minutes posted

in the previous quarter.

This represents a 3.8% growth

from the preceding quarter.


4Q16 1Q17 2Q17 3Q17

101,981,079

98,475,931

113,135,755

117,391,241

Intnl incoming on Mobile

Intnl incoming on Mobile

Roaming Minutes

This quarter registered a total of

17 million roaming minutes by

foreign networks compared to the

13 million roaming minutes

recorded in the foreign networks.

This translates to a 9.3% growth in

foreign roaming minutes lower

than the 13.9% growth realized in

the previous quarter.

The growth in OTT services such

as WhatsApp calls, Viber and

Skype among others contributes

to the sluggish growth inforeign roaming minutes.


4Q16 1Q17 2Q17 3Q17

12,885,369

16,924,997

18,689,670

17,276,576

11,322,779

7,396,734

9,029,534

13,040,778

Roaming Traffic, Sept 17

Roaming Minutes in Foreign networks

Roaming Minutes by Foreign networks

Communications Infrastructure, PIPs and PSPs.

The number of Base

Transceiver Stations (BTSs)

increased during the quarter

by 0.6% from 4,259 to 4,286.

The number of PIPs remained

the same as of the previous

quarter at 23. The number of

PSPs as well remained

unchanged at 33.


Internet And Data Market


International Bandwidth

Bandwidth - the data transfer

rate - is the amount of data that

can be carried from one point to

another in a given time period

(usually per second).

There has been growth in

total international

bandwidth. By the end of

September 2017, total

international bandwidth in

the country stood at

68,360.1 mbps.

This has encouraged and

grown data usage and led to

declining data prices.


Dec-16 Mar-17 Jun-17 Sep-17

Total Bandwidth (mbps) 49,984.3 55,482.6 61,585.6 68,360.1

Bandwidth per1,000,000 inhabitants

1,366.0 1,472.7 1,634.7 1,814.5

-

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

1,600.0

1,800.0

2,000.0

-

10,000.0

20,000.0

30,000.0

40,000.0

50,000.0

60,000.0

70,000.0

80,000.0

Bandwidth Growth, Sept 2017

Internet Subscriptions & Usage


Subsequent to new

growth in international

bandwidth is 9.4%

growth in overall internet

connectivity.

The mobile internet

segment has again

continued with its

impressive growth,

posting 14.8 million

accounts at the end of

September 2017.

This is attributed to the

introduction of low cost

bundled internet offerings

by a number of internet

service providers.

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

20,000,000

As of Dec 2016 As of March2017

As of June 2017 As of Sept 2017

10,076,059

11,694,927

13,393,142

14,818,757

148,300 153,150 158,000 162,850

16,330,983 16,484,312 17,102,456

18,148,923

Estimated Internet subscription (Mobile)

Estimated Internet subscription (Fixed)

Estimated Internet users

Trend in Estimated number of internet

users

By end of September

2017, an estimate of 18.1

million internet users

were registered from 17.1

million users regietered

in the previous quarter

This translates to

internet Penetration rate

of 48.2 internet users per

100 inhabitants.


16,330,983

16,484,312

17,102,456

18,148,923

Dec-16 Mar-17 Jun-17 Sep-17

Estimated internet users

Mobile internet Access

The growth in mobile broadband

access and usage is as a result of;

a) increasing 4G and 3G coverage

b) Dropping smartphones and

modem prices

c) Dropping bandwidth prices

By the end of September 2017, the

Average price per MB using 1GB

bundle was shs.29.1

The chart on the RHS shows

comparative rates of 1GB pricing.

More comparisons at www.kompare.ug


30,000

34,500

15,000

35,000

32,000

28,000

- 10,000 20,000 30,000 40,000

1GB MTN bundle

Africell 1GB

Airtel 1.25GB bundle

1GB (Vodafone)

smile Lite bundle(1GB)

1GB UTL (GPRS/Edge)

Monthly Mobile Internet capacity based pricing, sept 2017

Tariffs

All the operators are operating different tariff

plans, and the comparative rates are available on

www.price-check.co.ug and www.kompare.ug

which are online resources for evaluation and

comparison of different tariff plans. These two

price comparator service providers are UCC

approved. However, the common prepaid voice

tariff plans across networks is the per-second one.


http://www.price-check.co.ug/

http://www.kompare.ug/

Tariffs

By the end of September 2017, all operators save for Africell and UTL had uniform on

net per second rates of Ugx Shs 3/=

Promotional offerings have also taken more importance with operators offering a variety

of short term plans targeting different market segments.


MTN Airtel Africell UTL Vodafone Smart K2

Onnet 3 3 1 2.5 3 3 3

Offnet 3 3.5 5 3 3 5 4

0123456

Pri

ce (U

gx)

Operator

Per second Call Rates (Ugx) Q3 2017

Onnet Offnet

SMS Rate Comparisons, Sept 2017


100

110

90

99 99

75

100

130

110

90

99 99

75

100

0

20

40

60

80

100

120

140

MTN Airtel Africell UTL Vodafone Smart K2

SMS RATES Q3 2017

Onnet Offnet

As of end of September 2017, the lowest sms rate is being offered by Smart

Tellecom, followed by Africell.

Broadcasting

In this sub sector, the number of operational Free-to-Air (FTA) TV

stations is 31 as was the case in the previous quarter. While the

number of digital terrestrial TV stations and cable TVs remained

unchanged at two (2) and three (3) respectively. The number of digital

satellite TV stations changed from four to five with the inclusion of

Kwese TV. The number of operational FM stations changed from 275

to 258 as shown in the table below.


IndicatorsAs of Dec

2017

As of March

2017

As of June

2017

As of

September

2017

Operational Free to Air TV

service providers28 28 31 31

Operational TV stations

(Digital terrestrial stations)2 2 2 2

Operational TV stations

(Digital satellite stations)4 4 4 5

Cable TVs

3 3 3 3

Operational FM Radio

stations 292 292 275 258

THIRD QUARTER (JULY-SEPTEMBER

2017)

Pay Television

Eight (8) Pay Televisions are operational in the market, two

(2) of which broadcast using terrestrial, five (5) use satellite

and one (1) broadcasts over cable. Five of the Pay TVs

broadcast country wide. The table 9 below lists the Pay TV

companies and their areas of coverage.


Pay TVs, Mode of broadcasting and Geographical coverage

No. Station Name Mode of

Broadcasting

Transmitter locations giving 60km radius

of Coverage from each location

1 SIMBA TV (a merger

of Cable TV and

TVNXT)

Cable Internet Kampala and Jinja

2 GOtv Terrestrial Kampala, Jinja, Iganga, Mbarara, Kasese

Masaka, Mbale, Lira, Gulu, Arua, Entebbe

3 STARTIMES Terrestrial Jinja, Kampala, Luwero, Masaka, Mbale,

Mbarara, Nakasongola, Entebbe, Fort

portal, Gulu, Ssesse Island

4 DStv Satellite Countrywide

5 AZAM TV Satellite Countrywide

6 STARTIMES Satellite Countrywide

7 ZUKU TV Satellite Countrywide

7 Kwese TV Satellite Countrywide


Courier and Postal Services The number of International,

Regional and Domestic

Couriers remained 8, 4, and

7 respectively as was the

case in the previous quarter.

The Domestic ordinary

letters posted grew from

39,210 to 44,460 (13.4%

growth), the domestic

registered letters posted

dropped from 2,605 to 2,589

(a 0.6% drop) and the

Domestic express mail

services dropped from

59,602 to 32,584 (a 45.3%

drop).


Post and Courier Service

Providers

Dec 16 March 17 June 17 Sept 17

Major Postal 1 1 1 1

International

Courier

7 7 7 8

Regional Courier 6 4 4 4

Domestic

Courier

8 8 8 7


Postal & Courier Access

Indicator 1Q17 2Q17 3Q17

Number of permanent post

offices

334 334 334

Number of permanent post

offices connected to postal

internet

33 33 49

Post offices offering public

internet services

25 25 32

Private letter boxes 82,900 82,900 82,900

Courier Access Points 846 851 858


Quarterly Postal Mail Volumes


4Q16 1Q17 2Q17 3Q17

67,372

52,144

39,210

44,460

1,170 1,126 2,605 2,589

37,638 34,076

59,602

32,584

Domestic Postal Mail Volumes, Sept 17

Domestic Ordinary letter post Domestic Registered Letter Post Domestic EMS

Quarterly Domestic Courier Volumes


-

100,000

200,000

300,000

400,000

500,000

600,000

1Q17 2Q17 3Q17

442,177

513,589 530,612

54,133 63,422 64,960

Courier items collected & posted within Kla Courier items collected & posted outside Kla

Select International Postal

Traffic, Sept 2017


4Q16 1Q17 2Q17 3Q17

4,283

6,835 5,312 6,096

482 740 1,191

701

8,900

44,519

31,252

41,416

5,507

23,025 22,238

60,178

East African Letter post Incoming East African Letter post Outgoing

European Letter post Incoming European Letter post Outgoing

Courier tariffs for Select Destinations 500gm, Sept 17

License Kampala Mbarara Nairobi UK India USA

UPL/ EMS Major postal 2300 5000 35000 50000 55000 65000

New Times

(DHL)

Domestic 6500 17000 N/A N/A N/A N/A

G4S Domestic 5000 15000 30000 N/A N/A N/A

Big Orange Domestic 5000 15000 N/A N/A N/A N/A

Daks International 4000 12,000 70,334 96,343 88,652 136,055

Nation

Courier

Regional 5000 15000 30,000 N/A N/A N/A

Aramex International 4000 150000 30000 50,000 60,000 60,000

Pax

Transport

international 4000 12000 35000 55,000 60,000 65,000

Sm Cathan Domestic 4000 20000 N/A N/A N/A N/A


Telecommunications Tax Contribution

A total of UGX 134 billion was realized in tax revenue during the quarter July- September

2017 compared to 119 billion collected in the preceding quarter. collections where largely

from VAT and Excise duty.

The increase in tax collection was largely a result of increased service usage.


-

10,000,000,000

20,000,000,000

30,000,000,000

40,000,000,000

50,000,000,000

60,000,000,000

70,000,000,000

80,000,000,000

4Q16 1Q17 2Q17 3Q17

Excise 64,425,672,432 72,776,504,199 65,076,882,116 67,607,063,276

VAT 58,344,272,317 65,255,976,299 46,116,857,107 58,509,996,039

PAYE 8,495,134,931 7,875,003,257 8,486,418,889 8,536,977,753

Telecommunication Tax Revenue, Sept 2017

Mobile Money Services

THIRD QUARTER (JULY-SEPTEMBER

2017)

Mobile Money Subscriptions

As shown in the graph, the gap

between mobile subscription and

mobile money subscription is

narrowing each next quarter. Soon a

saturation level shall be reached

were the number of mobile

subscribers shall equal the number

of mobile money subscribers.

Mobile money transfer service has

continued to transform the way of

doing business in the country and

expanded financial inclusion for the

unbanked.

832,704 new mobile money

subscriptions were realized in the

quarter ending September 2017.

This translates into a quarter to

quarter growth of 3.6% compared to

1.6% growth realized in the

preceding quarter.


20,000,000

20,500,000

21,000,000

21,500,000

22,000,000

22,500,000

23,000,000

23,500,000

24,000,000

24,500,000

25,000,000

As of Dec2016

As ofMarch2017

As ofJune2017

As ofSept 2017

Sub

scri

pti

on

s

Qaurters of the Year

Number of Mobile money subscriptions

Number of Mobile Subscriptions

Mobile Money Transactions

4Q16 1Q17 2Q17 3Q17

No. of Transactions 291,373,524 279,006,959 287,558,423 305,757,311

Value of

Transactions

13,079,801,115,908 13,759,142,582,498 14,448,875,209,547 16,748,857,697,159

Balances on

customer Accounts

353,733,473,433 322,856,595,238 323,212,338,095 418,978,104,604

Number of Mobile

money Agents

132,937 140,765 147,146 151,644


There has been a 16% growth in total value of transactions from UGX 14.448

trillion recorded in quarter 2 to UGX 16.748 trillion. The number of

transactions also increased to Ugx 305.7 million as of September 2017.

Balances on customer accounts as well as mobile money Agents continued to

grow to UGX 418.9 billion and 151,644 agents respectively as indicated in the

table below.

Consumer AffairsConsumers of communication

services when dissatisfied with a

service are required to first lodge

complaints with their respective

service providers. Where a consumer

remains dissatisfied, they can then

lodge complaints with UCC, at which

point it becomes a second level

complaint. The data used in this

report represent second level

complaints to UCC. However, the

figures may include some first level

complaints from consumers who

claim inability to access their service

providers.

A total of 35 complaints were

received from the consumers of which

32 were resolved and closed, 3 were

pending awaiting response from

service providers.

Out of all the complaints received:

42.9% of the complaints were

received through phone calls,

40% of the complaints were

received through e-mail,


received through walk-in clients


received through letters to the

commission


Number of Complaints received and resolved by quarter


34

3635 35

2930

3132

AS OF DEC 2016 AS OF MARCH 2017 AS OF JUNE 2017 AS OF SEPT 2017

Number of complaints received Number of complaints resolved

Types of complaints received, resolved and pending in the period under review


8

7

4 4

3

2 2 2

1 1 1

6 6

4 4

3

2 2 2

1 1 1

2

1

0 0 0 0 0 0 0 0 0

TYPES OF COMPLAINTS

RECEIVED RESOLVED PENDING

post, broadcasting and telecommunications market ... · a) increasing 4g and 3g coverage b)...

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