Next big thing at MTN

Company plans to widen data usage, lower tariffs

MTN Uganda’s Chief Executive Officer, Wim Vanhelleputte who has spent eight months in office describes himself as a forward looking manager wanting his leadership to grow company profitability while meeting customer demands.

He says the most critical thing he is currently preoccupying him is how to boost company’s revenue through the current, popular money maker segment – data.

He told The Independent on the sidelines of the World Economic Forum “Internet for All” organised by the Uganda Communications Commission and the ministry for ICT in Kampala on March 28 that they are working on mobile money linked solutions to enable customers to access soft loans for, specifically, buying smartphones.

The idea is to increase smartphone penetration – currently stuck at 15%, lower than Sub Saharan average of 25% – and grow numbers of data usage and sales.

“I cannot tell you the exact month that we intend to launch the new solution but it will be this year,” Vanhelleputte said.

Vanhelleputte said MTN is committing up to US$60 million per year to put in place infrastructure and new solutions for better service delivery in the sector.

The innovative MTN investment appears to have been well timed. According to the UCC, internet users in Uganda increased by 7.9% to 16.7 million in the third quarter of 2016 while general internet penetration increased from 42.5% in Q2 of 2016 to 45.8% in Q3 of the same year.

The number of telephone subscribers has jumped from around 8.5 million in 2007 to 23 million as of March 2017. But a bigger percentage of these devices are not smartphones which is why MTN badly wants the new solution to come.

Uganda’s most widely used 3G internet network covers only 7% of the national geographical area and 27% of the population according to the UCC. The biggest population coverage is in the Central region (48%), West (20%), East (21%) and North (16%).

Vanhelleputte said for Uganda to get more internet users, issues to do with proper appropriation of spectrum frequencies and tax reforms like waivers on imports on smart devices need to be implemented.

When that happens, Vanhelleputte says, chances are that data tariffs would also reduce.

He said that the same thing has happened to voice component because volumes have increased over the years.

“A decade ago the average cost of one second voice call was Shs 8 but because the number of subscribers has increased you now have an average of Shs 4 being charged on the per second package across the sector,” he said.  Uganda currently reportedly has 23 million registered mobile phone subscribers, with MTN having 11 million; the balance is shared amongst Airtel and other small players.

Currently telecommunication companies offer data bundles for as low as Shs300 (10Mbs) for mobile internet users. But they may last for less than a minute depending on type of smart device and apps running.

Analysts say MTN’s mobile phone loans might benefit many individuals given that peoples’ disposal incomes are declining. It might also improve revenue performance for service providers.