Airtel takes on rivals with 4G internet

New initiative expected to drive the company’s revenue growth

Kampala, Uganda | ISAAC KHISA | Airtel Uganda has unveiled a fourth generation (4G) internet services, stepping up the battle for customers in country’s telecommunication market.

MTN Uganda and Africell unveiled their 4G services in 2015 and 2016 respectively, with the latter availing the service to subscribers only in Kampala, Mbale, Jinja, Mbarara, Arua, Masaka, Wakiso and Entebbe areas.

Airtel Uganda Managing Director, V.G. Somasekhar, said the company has invested US$800million in the last eight years in upgrading its network countrywide.

He said the company now boasts of 1,632 network sites and over 3,900 kilometres of fiber optic, making it possible for subscribers to enjoy an improved experience in internet based activities.

“This encompasses video conferencing, video calling, video streaming, gaming services and mobile internet access,” he said.

This new internet services comes at the time the government is implementing the National Broadband Policy that among others requires telecom companies to be able to cover the entire geographical area of Uganda so as to enable universal access, promote effective competition and quality of service as a condition to be granted an operating licence.

Godfrey Mutabazi, the Executive Director at the Uganda Communications Commission, said the evolution of technology in Uganda has greatly improved over the last decades driven by the private sector.

“We experienced the first generation networks which were limiting because of quality and capacity. Now, information and communication technology in Uganda has greatly changed due to significant private sector investment,” he said.

Mutabazi revealed that the telecom sector has invested close to US$2.3billion in the ICT infrastructure, boosting voice, data and mobile money services.

The Indian High Commissioner to Uganda, Ravi Shankar, said the new service means a fast and reliable internet that will promote financial and digital inclusion in Uganda.

“As a result, our countries (India and Uganda) emerge as leaders for a new era of shared prosperity,” he said.

The First Deputy Prime Minister and Deputy Leader of Government Business in Parliament, General Moses Ali appreciated Airtel because of the level of substantial investment that it has made in Uganda.

He said it is time for a number of sectors including education to tap into the fast internet services while providing quality education services to the rural communities.

Consistent profit growth

Airtel’s new step is also expected to boost its profit margin in an industry that has become so competitive.

In the Financial Year 2017/18, the company recorded a 53% growth in net profit to Shs245bn on the back of growth in value added services, data and mobile money services.

The superb growth meant that its profit growth was more than that of the country’s largest commercial bank – Stanbic Bank – which recorded a merely 5% growth in net profit to Shs200bn in 2017.

Airtel’s revenue increased from Shs1.03trillion to Shs1.16trillion during the period under review, with revenue from mobile money services increasing from Shs128.42bn to Shs190.7bn while that from value added services such as voice mail, phone back-up, post-paid bill payment, and data increasing from Shs306.28bn to Shs372.15bn.

The telco’s earnings from airtime sales, however, grew marginally from Shs503bn to Shs506.9bn during the same period under review as customers embraced data services.

Currently, Airtel Uganda has approximately 10million subscribers compared with MTN’s 11.2million.

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