Lack of IDs cut sim card sales -Airtel MD

SIM card registration deadline is fast approaching; what have you achieved so far?

Some 10% of our customers are not yet registered and to be honest with you, I am not optimistic that we will have registered all of them by deadline time. There is belief in Uganda that every single deadline is extended. It is a cultural thing. If we lose the 10%, it will be a massive loss. We have taken every single step to ensure that these customers are registered. There are customers that don’t have registration details (NINs) and are unable to register. We believe that if these customers are properly motivated they will register. Our Sim card sales for new customers have dropped by about 20-30% because many people do not have national identity card. That said, from our perspective, the registration exercise needs to be done in a way that allows us not to get too hot in the process. Obviously it is good for countering all sorts of crime.

Mobile money transactions have grown to Shs 4.9 trillion as of March this year compared to Shs 490 million in March 2009. How is Airtel money faring in this growth?

The growth is tremendous and it is impacting tremendously on our business. Airtel money has about 4 million customers transacting on the platform. Our traditional business – voice is growing but Airtel money has been doing spectacular. The industry has many competitors who are doing a lot in terms of innovations. Airtel is introducing products on this platform. We have the Jumo partnership where we are facilitating the offering of micro-loans to customers. There are many other innovations in the pipeline.

But the platform (mobile money) lacks clear legal regime for it to operate in Uganda. Where is its future in your view?

We are engaging with government all the time. The regulator of banks is the central bank of Uganda. We always let our partner banks to engage with the central bank on mobile money issues. We do believe there is need for a more robust legal framework not because our customer’s money is at risk but simply to operate comfortably. Our customers are not worried at all. Overall, there is a lot of confidence within the system. My message here is that anything regarding mobile money has to be treated extremely sensitive because its effect on the economy is significant.

In terms of data service for Airtel, what supporting factors are fastening growth on that front?

It’s really based on improvement of our network. We led in terms of number of 3G sites. We have about 1200 sites and have been growing every year. The quality of the network is superior. From a user experience, data has been improving. In terms of pricing, we are extremely aggressive. We don’t want to be as aggressive as Africell, Smile and Vodafone who are launching themselves as data players yet they will never have resources to build nationwide network. In terms of tariffs, we have always first examined the tariff structure of our competitors before responding. We are thinking a lot about our loyal customers in line with weekly and monthly data bundles.

What specific threats is the telecom sector facing in Uganda today?   

We continue to see that whenever the country suffers economically we suffer in the same way. We have realised that in some parts of this year and last year when the economy was bad, some customers who used airtime of Shs 30, 000 did cut spending to Shs 10, 000. This is always the case when the economy is suffering. That is obviously not good for our business plans. At Airtel, we try to operate with minimal costs by using efficient technology. We are currently running at a much lower cost compared to three years ago. We have negotiated better contracts with our local partners and have avoided spending in US dollars.

What new things should the market expect from Airtel Uganda in the near future?

We will be expanding our network and offering new innovations. We expect to have more innovations and coverage for Airtel money. Uganda has about 1.2 million refugees who are not connected to the network. We plan to connect them. In the next few weeks, we will introduce LTE networks.

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