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Market Performance Report2Q20(April - June 2020)
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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 the communications market overview to:1. The industry2. Prospective entrants3. Government4. Academia and other stakeholders
UCC does not give any warranty and may not be liable for the interpretation arising from its use or misuse.
Legal Disclaimer
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This is a review of the industry performance, trends and key developments for the quarter starting April to June 2020. The analysis has also tried to pay special focus on the effects of COVID-19 on the market. This is a recurring theme throughout the report. The report covers:
1. Telephone Subscriptions2. Data Subscriptions3. Financial Services4. Network Infastructure5. Domestic Traffic6. International Traffic7. Monthly Average User Traffic Profile8. Roaming9. OTT Services10. Revenues11. International Interconnect12. Postal Services13. Broadcast and Multimedia Services
Introduction
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1. Telephone Subscriptions
Total Revenue-Earning Customers (REC)/subscriptions dropped from 28.4 million at the end of March 2020 to 25.5 million at the end of June 2020.The 11% customer contraction is the first recorded market reduction in the last two years (8 quarters). The market contraction was attributed to:
A clean-up of the subscriber register by one of the leading mobile cellular providers that rid the register of SMS-receiving only SIMs.
Suppressed new demand because of the national COVID 19 lockdown that preceded the quarter and its subsequent effects on spending patterns.
Retail store closures across the country that prevented on boarding of new customers to networks.
Seasonal inactivity of SIMs previously owned by December holidaymakers and travellers who usually leave the country in the first quarter of the year.
A reported 13% global reduction in shipments of smartphones resulting in disruption of domestic supply chains.1
We believe the above factors led to the 2.9 million drop in active subscriptions. This situation is not peculiar to Uganda but has been experienced in other global markets following extended national lockdowns. Chinese mobile carriers, for example, lost a reported 15 million users between December and March 2020.
1 Source: https://techcrunch.com/2020/04/30/smartphone-shipments-dropped-13-globally-and-covid-19-is-to-blame/
Section A : Access
30, 000, 000
29, 000, 000
28, 000, 000
27, 000, 000
26, 000, 000
25, 000, 000
24, 000, 000
23, 000, 000
22, 000, 000
21, 000, 000
20, 000, 000
0
70
69
68
67
66
65
64
63
62
61
60
3Q19 4Q19 1Q20 2Q20
82%
7%
Total mobile subscribers Quarter-on-Quarter Subscriber growth Telephone Penetra�on per 100 subscribers
4%Growth
7%Growth
11%Drop
25,682,708
28,450,429
25,452,770
61
63.7
66
67
26,691,131
Quarter-on-Quarter Subscriptions Movements
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Note: These numbers are drawn from registered mobile subscriptions that have undertaken at least one billable service in the 90-day period ending June 30th, 2020.
Based on 2020 population estimates of 41.5 million, national tele-density now stands at 61% having dropped from 67% at the end of March 2020.
Note: Tele-density calculated using UBOS population figures 2020
2. Internet Subscriptions
Following record growth posted in 1Q20 of more than 1 million mobile internet subscriptions, the quarter 2Q20 returned subdued growth numbers of less than 100,000 new connections.
At the end of June 2020, total internet stood at 18.9 million connections, translating into a penetration of 46 internet connections for every 100 Ugandans.
While the number of new mobile internet connections is not as outstanding as the 1Q20 additions, this remains noteworthy growth in light of the general contraction in mobile subscriptions and devices. This new growth is indicative of the conversion of previously Voice-only customers into internet users.
The customer migration from 2G to data services may be the result of:
I. New demand from Work-From-Home protocols instituted by different corporate bodies following the nationwide lockdown.
II. New price competition resulting in subsidised internet offerings by the leading carriers during the lockdown.
3Q19
4Q19
1Q20
2Q20
81,274 25,601,43425,682,708
25,452,770
85,750 26,605,42126,691,131
85,929 28,364,50028,450,429
85,738 25,367,032
1,008,423
1,759,298
2,997,659(Reduction)
Fixed line Subscribers Mobile Subscribers Total Subscribers Net quarterly Addi�ons
Internet Subscription and Growth Trends
Spread of Mobile and Fixed Line Connections
20,000,000
19,000,000
18,000,000
17,000,000
16,000,000
15,000,000
48
47
46
45
44
43
42
41
40
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17,690,995
18,968,667 18,877,325 18,825,25318,379,321
18,944,471
Jan Feb Mar Apr May Jun
46
43
46
45 45
44
Total Internet Subscribers Internet Connec�ons for Every 100 Ugandans Net Susbcriber Addi�ons
1,277,672 565,150 (91,342)Reduction
(52,072)Reduction
(445,932)Reduction
Internet Connections per 100 Ugandans
Subscribers
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tIII. Targeted customer migration campaigns by the two leading MNOs during the period.
These campaigns specifically offer customers promotional data bundles to test the 4G/3G experience.
IV. Knock-on effects from heightened infrastructure investment by the MNOs in 2019
As illustrated below, mobile handsets remain the dominant form of internet access, accounting for 99.86% of subscriptions at the end of June 2020.
Device Distribution of Network Connected Devices
The global smartphone market has witnessed the first year-on-year contraction with leading handset makers like Samsung, Huawei and Xiaomi reporting double-digit percentage drops in global handset shipments.
Domestic Device Market
In Uganda, the early knock-on effect of the global market contraction in 2Q20 has been a 1% reduction in total internet-enabled gadgets connected to the network (smart and feature phones). These have dropped from 24.4 million at the end of March to 24.1 million at the end of June 2020.
This is the first time that new devices have failed to offset the number of discontinued handsets3 on the network.
Subsequently, the slowdown in new device connections has had a trickle-down effect of stagnant internet subscriptions.
2 Source: https://techcrunch.com/2020/04/30/smartphone-shipments-dropped-13-globally-and-covid-19-is-to-blame/3 Voluntarily discontinued on account of performance, age or have been previously owned by visitors who have since left the country
4Q19 1Q20 2Q20
16,906,819 18,846,885 18,917,120
32,37030,440
27,351
Fixed internet subscribers Mobile internet subscribers Total internet subscribers
16,939,189 18,877,325 18,944,471
Spread Of Mobile and Fixed Internet Subscriptions
Figure 1 - Smartphone shipments by the 10 leading manufacturers between 1Q19 and 1Q202
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Though growth in devices was stunted by extenuating circumstances, this was not for lack of industry effort to revive it.
Amidst the disruption in global supply chains, domestic carriers have nonetheless continued with partnerships with independent hardware distributors to stimulate new handset sales and connections. Examples of these partnerships include:
I. MTN Uganda Limited partnered with Tecno Mobile to launch the Camon 15 series in June 2020 at a launch price of UGX 688,000. This included 3GB free every month for the first three months after purchase.
II. Airtel Uganda Limited in partnership with Infinix launched the Inifinix Note 7 series priced between UGX 655,000 – UGX 834,000. The handsets come with a number of monthly data offers
Device Movements and Distribution
FEATURE PHONES Can make and receive calls, send text messages and provide some of the advanced features found on a smartphone.
SMARTPHONESA class of mobile phones and of multi-purpose mobile computing devices. They are distinguished from feature phones by their stronger hardware capabilities and extensive mobile operating systems, which facilitate wider software, internet (including web browsing overmobile broadband), and multimedia functionality (including music, video, cameras, and gaming), alongside core phone functions such as voice calls and text messaging.
BASIC MOBILE PHONECan make calls and send text messages
Oct-19 6,169,968
Nov-19 6,524,656
Dec-19 6,609,717
Jan-20 6,860,946
Feb-20 6,981,855
Mar-20 7,091,860
Apr-20 6,973,679
May-20 6,939,916
Jun-20 6,961,778
Oct-19 17,147,310
Nov-19 17,169,003
Dec-19 17,179,345
Jan-20 17,458,317
Feb-20 17,072,042
Mar-20 17,278,770
Apr-20 17,153,420
May-20 17,027,605
Jun-20 17,090,406
Oct-19 3,176,620
Nov-19 3,268,166
Dec-19 3,409,724
Jan-20 3,422,727
Feb-20 5,071,470
Mar-20 5,076,937
Apr-20 5,043,103
May-20 5,023,126
Jun-20 5,087,856
Monthly Users
Monthly UsersMonthly Users
29,600,000
29,200,000
28,800,000
28,400,000
28,000,000
27,600,000
27,200,000
26,800,000
-
-
-
-
-
-
-
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20
Total Devices Net addi�ons
1,383,377
(277,365)reduc�on (179,555)
reduc�on 149,393
322,200
27,
741,
990
29,
125,
367
29,
447,
567
29,
170,
202
28,
990,
647
29,
140,
040
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3. Mobile Financial Services
Amidst the drop in mobile cellular subscriptions, the Mobile Financial Services segment showed great resilience posting 500,000 new registrations.
Similar to the preceding quarter, the bulk of new mobile money account registrations was derived from the incumbent subscriber base.
At the end of June 2020, the number of registered mobile money accounts had grown to 25.9 million accounts from 25.5 million at the end of March 2020. This growth translated into a quarter on quarter growth of 2% despite a drop in mobile subscriptions of 11% between March and June 2020.
Of these, 21 million accounts had partaken in at least one billable Mobile Money transaction in the 90 days preceding 30th June 2020. This translates into a 1% quarter on quarter growth in active wallets.
The resilience of Mobile Money markets is not peculiar to Uganda but has been witnessed across most Sub-Saharan markets.
new registered 500,000Mobile Money
Accounts
Infinix Note 7 Tecno Camon 15 SIMI
In another market, the first Ugandan-assembled SIMI handsets hit export markets with more than 18,000 units shipped to Morocco in May 2020. This shipment was flagged off by the State Minister for Finance, Investment and Privatisation.
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Registered mobile money Subscribers
Ac�ve mobile money subscribers
26,000,000
25,000,000
24,000,000
23,000,000
22,000,000
21,000,000
20,000,000
19,000,000
18,000,000
17,000,000
16,000,000
15,000,000
6564636261605958575655545352515049484746454443
24,690,251
18,684,504
25,384,405
20,974,231
25,906,360
20,948,133
5252
46
6463
61
Number of ac�ve mobile wallets per 100 subscrip�ons
Number of registered mobile wallets per 100 subscrip�ons
3%growth
3%growth
Registered accounts Ac�ve accounts
76% 83% 81%
4Q19 1Q20 2Q20
Growth in Registration and Active Sims
Quarter on Quarter Activity Ratio
With an activity ratio of 81% as of June 2020, Uganda boasts of one of the highest registration-wallet conversion ratios in the region.
The growth in mobile money subscriptions amidst the national lockdown could be attributed to:
Revision of mobile money transfer rate cards instituted by most of the carriers. On March 19th 2020, MTN Uganda and Airtel Uganda implemented a zero charge on person-to-person transactions on the same network.
These were reintroduced at a 50% discount to pre-lockdown levels on May 26th 2020 The waiver of bank-to-wallet charges instituted by the central bank. Increased e-commerce activity due to limited mobility.
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tEarly press reports indicate that Kenya recorded more than 1.6 million new accounts in the early months of the COVID 19 pandemic, while Rwanda reportedly posted more than 300% growth in peer-to-peer transfers on account of COVID 19-related lockdowns.
*These figures are based off operator submissions to the Commission.
Mobile Money Agent Network
The number of active mobile money agents grew from 213,295 in March 2020 to 219,169 by the end of June 2020. This may signal complete recovery from the earlier agent dip realised in December 2019.
4. Network Growth
The biggest network developments in the quarter were largely network optimization efforts by the local MNOs in response to traffic migration from the Central Business District (CBD) to the city outskirts. The traffic migration was largely the result of the adoption of Work-From-Home protocols across many businesses.
Furthermore, residential broadband demand experienced new surges resulting from new demand for online streaming services.
While in developed markets the Work-From-Home protocols resulted in a shift cellular to fixed internet solutions, the same cannot be said for Uganda because mobile cellular solutions account for more than 95% of the broadband access network.
4Q19 1Q20 2Q20
220,000
215,000
210,000
205,000
200,000
208,460
204,141
213,295
219,169
3Q19
Access Points
Quarter on Quarter Agent MovementsTotal Number of Agent Access Points
Agent Access Points over 4 Quarters
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Other Developments in the African Telecom Infrastructure & Access Market
The biggest connectivity development for the continent is the Facebook-led 2Africa Undersea Cable System project . The 37,000km cable subsystem will run around Africa with landing points in Portugal and Spain and 21 landing stations in 16 African countries.
The 180 Tbps subsystem is expected to go live by 2024 with open access terms for all network operators on the continent. Other project partners include MTN Group, Telecom Egypt, Vodafone, Saudi Telecom Company, and Orange MENA, among others.
4 Source:https://www.prnewswire.com/news-releases/2africa-a-transformative-subsea-cable-for-future-internet-connectivity-in-africa-an-nounced-by-global-and-african-partners-301058889.html
Figure 2 - Facebook Planned Cable Network
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5. Domestic Voice Traffic
The industry posted a total of 13.1 billion minutes of domestic talk. This includes both on net (calls between subscribers on the same network) as well as off net traffic (calls between subscribers on different mobile networks).
The performance represents a 5% quarter-on-quarter drop in total domestic traffic. This drop may be attributed to suppressed commercial activity during the early days of the national lockdown. Indeed April, which was characterised by a complete lockdown, recorded the lowest call traffic in the 6 months January – June 2020.
Section B : Service & Usage
12,551,606,697 13,946,142,072 13,109,234,519
4Q19 1Q20 2Q20
Aggregate Domestic Quarterly Voice Traffic
Jan Feb Mar
4,63
8,89
4,24
9
4,33
4,65
3,46
8
4,58
2,00
2,40
8
13,555,550,125
1Q20
Apr May Jun
4,25
4,86
6,11
4
4,32
2,41
6,43
3
4,38
9,64
0,46
4
12,972,923,010
2Q20
ON-NET MINUTES
Jan Feb Mar
66,5
00,6
31
60,4
31,0
25
63,6
60,2
90
190,591,946
1Q20
Apr May Jun
42,6
05,0
13
44,7
33,4
33
48,9
73,0
63
136,311,508
2Q20
OFF-NET MINUTES
On-Net and Off-Net Traffic
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Total quarterly on-net traffic stood at 13.0 billion minutes down from 13.6 billion in the quarter January-March 2020.
The market has averaged 45.4 million off net minutes per month during the quarter, with an off-net traffic peak in June of 49 million minutes.
In percentage terms, on-net domestic traffic dropped by 4% while off-net domestic traffic dropped by 28% in the three months April – June 2020. The difference in percentage drops across the two traffic categories may be representative of the different affordability sensitivities across the two traffic categories.
It is probable that off-net demand shifted to online messaging solutions and on-net voice bundles in response to drops in discretionary expenditure during the lockdown.
In terms of intra-quarter performance, the market has averaged 4.3 billion on-net minutes per month during the quarter, with an on-net monthly traffic peak in June of 4.4 billion minutes. The June traffic peak was most likely the result of the partial lifting of national lockdown restrictions and the subsequent resumption of commercial activity.
During 2Q20, the market averaged 161.4 on-net minutes per subscriber per month, or approximately 5 minutes per day.
In the same period, the market averaged 1.70 off-net minutes per month per subscriber during 2Q20.
USSD Traffic
On the back of strong performance of the mobile financial service business, USSD traffic grew by a commensurate factor of 15% between 1Q20 in 2Q20.
The total number of sessions averaged 2.01 billion per month during the quarter. The quarterly peak was realised in June 2020 with a total of 2.7 billion USSD sessions.
4Q19 1Q20 2Q20
6,000,000,000
5,500,000,000
5,000,000,0005,182,256,012
5,397,271,077
6,228,096,999
USSD Traffic
Quarter on Quarter USSD Traffic MovementTotal USSD Sessions
Quarter on Quarter Ussd Traffic
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t6. Broadband Traffic
Global lockdowns have been characterised by growth in total broadband traffic across various countries. Markets like the United Kingdom, USA, Japan, South Korea and Italy have reported traffic spikes as high as 60% during the period of extended lockdowns.
During 2Q20, total quarterly broadband traffic has grown to 59.1 billion MBs. This is a 21% increase from the previous industry record of 49.0 billion MBs in the quarter January-March 2020.
In terms of intra-quarter performance, the market has averaged 19.7 billion MBs downloaded per month during the quarter, with a traffic peak of 20.6 billion in April 2020 at the height of the national lockdown.
Subsequently, the lifting of the national lockdown in June resulted in a suppression of broadband demand with monthly broadband traffic dipping to 18.7 billion MBs. Despite this intra-quarter dip, June mobile broadband traffic still outperformed any recorded month of traffic outside of 2Q20.
Total quarterly broadband traffic translates into an average of 735.6 MBs per subscriber per month, or 24.5 MBs per day.
21,000,000,000
19,000,000,000
17,000,000,000
15,000,000,000
13,000,000,000
730
405
680
630
605
580
555
530
JAN FEB MAR APR MAY JUN
Total internet traffic(MBs in Billions)
Average MBs per subscriber
15.2615.42
18.34
20.62
19.99
18.73
732736
585
546
644
739
Tot
al In
tern
et tr
affic
Aav
erag
e M
Bs
per
Sub
scrib
er
Internet Traffic Vs. Average MBs Per Subscriber
A newindustryrecord of
Billion MBs59.1was set in 2Q20
Billion MBs20.6downloaded in
April 2020
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7. International Traffic
The period 2Q20 posted 190 million minutes of total international traffic. Yet again, Uganda remains a net traffic receiver with total incoming traffic accounting for 66% of total international voice traffic .
In terms of quarter-on-quarter performance, the segment posted a 2% dip in international traffic. The dip in traffic may yet again be due to disruptions in global supply chains experienced during the period. At a personal consumer level, international voice traffic demand may also have migrated to online calling and messaging services such as Zoom, Skype, WhatsApp etc.
Worth noting is the fact that while total international outgoing traffic shrunk by 11 million minutes in the quarter, total international incoming traffic grew by 8 million during the same period.
This traffic excludes Roaming traffic
42%74,559,983
58%103,616,174
42%80,156,135
58%110,882,443
39%76,165,544
61%117,847,112
34%65,396,757
66%125,051,145
7% 2% 2%
Incoming Traffic Outgoing Traffic
3Q19 4Q19 1Q20 2Q20
Growth Growth Drop
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Total international outgoing traffic shrunk from 76.2 million minutes in 1Q20 to 65 million minutes in 2Q20. This represents a 14% drop in total quarterly international outgoing traffic.
This drop may be attributed to returning residents from abroad, reducing the need for Ugandans to call abroad. Furthermore, Ugandans making international calls for business purposes due to global supply chains and relationships may have not had the need due to the global pandemic.
International outgoing traffic remains largely destined to the Northern Corridor partner states of Kenya, Rwanda and South Sudan, with which Uganda has special international traffic termination arrangements framework.
In 2Q20, ONA traffic accounted for 81% of total international outgoing traffic. The rest of the world only accounted for 19% of total international outgoing minutes.
Total international incoming traffic grew from 118 million minutes in 1Q20 to 125 million minutes in 2Q20. This represents a 6% increase in total quarterly international incoming traffic.
Total international incoming traffic grew from 118 Million minutes in 1Q20 to 125 Million minutes in 2Q20. This represents a 6% increase in total quarterly international incoming traffic.
International incoming traffic largely originates from the Northern Corridor partner states of Kenya, Rwanda and South Sudan, with which Uganda has special international traffic termination arrangements (through the ONA) framework.
85% of total international incoming traffic was from ONA partner states. The rest of the world only accounted for 15% of total international incoming minutes landed in Uganda.
Incoming International Traffic
ONA Traffic Distribu�on Rest of World Traffic Distribu�on
130, 000, 000
120, 000, 000
110, 000, 000
100, 000, 000
90, 000, 000
80, 000, 000
70, 000, 000
60, 000, 000
50, 000, 000
40, 000, 000
30, 000, 000
20, 000, 000
2Q19 3Q19 4Q19 1Q20 2Q20
76% 79% 83% 83%
24%
21%
17%17%
7%7%
Min
utes
Quarter-on-Quarter Traffic Growth
97,160,318103,616,174
110,882,443117,847,112
6%6%
85%
15%
125,051,145
ONA Traffic Distribu�on Rest of World Traffic Distribu�on
90, 000, 000
80, 000, 000
70, 000, 000
60, 000, 000
50, 000, 000
40, 000, 000
30, 000, 000
20, 000, 000
10, 000, 000
0
2Q19 3Q19 4Q19 1Q20 2Q20
79% 81% 81% 81%
21%
19%19%
19%
10%
8%
Min
utes
Quarter-on-Quarter Traffic Growth
67,824,948
74,559,98380,156,135
76,165,544
-5%-14%
81%
19%
65,396,757
Outgoing International Traffic
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161MINUTES
736MBs
1.7MINUTES
0.8MINUTES
1.6MINUTES
INTERNATIONALINCOMING
INTERNATIONALOUTGOING
OFFNET
MOBILE (MBs)ONNET
164MINUTES
538MBs
2.3MINUTES
1.0MINUTES
1.4MINUTES
INTERNATIONALINCOMING
INTERNATIONALOUTGOING
OFFNET
MOBILE (MBs)ONNET
164MINUTES
582MBs
2.3MINUTES
0.9MINUTES
1.4MINUTES
INTERNATIONALINCOMING
INTERNATIONALOUTGOING
OFFNET
MOBILE (MBs)ONNET
4Q19
1Q20
2Q20
Monthly User Traffic Profile
44 MBs Added
154 MBs Added
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t9. Roaming
The number of Ugandans roaming on foreign networks at the end of 2Q20 stood at 566,031. This represents a drop of 131,000 roamers as more Ugandans returned home in light of the COVID 19 pandemic.
The number of foreigners roaming on Ugandan networks stood at 643,923. This represents a drop of 230,000 roamers as foreigners returned to their respective countries of origin in light of the COVID 19 pandemic.
990,120
59%
873,987
56%
694,422
41%
697,402
44%643,923
53%566,031
47%
4Q19 1Q20 2Q20Inbound Roamers Outbound Roamers
Visiting Customers Vs. Ugandans Roaming in Other Countries
Distribution of Roamers (ONA vs. Rest of World)
240,978 249,689
460, 000
440, 000
420, 000
400, 000
380, 000
360, 000
340, 000
320, 000
300, 000
280, 000
260, 000
240, 000
220, 000
200, 000
180,000
Roamers
394,934
432,679
411,956
231,967
Apr-20 May-20 Jun-20
200,532 201,013
460, 000
440, 000
420, 000
400, 000
380, 000
360, 000
340, 000
320, 000
300, 000
280, 000
260, 000
240, 000
220, 000
200, 000
180,000
Roamers
283,316301,868
351,471
214,560
Apr-20 May-20 Jun-20
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3Q19
4Q19
1Q20
2Q20
9.3610.16
10.63
11.30
800,000 470,000 670,000New users
Worth noting is the fact that the Commission gave special exemptions for foreigner-owned SIM cards to continue receiving services beyond the duration of their visas and work permits. This may have contributed to the drop in inbound roamers as foreigners stranded in country switched to local SIMs.
10. OTT Services
OTT subscriptions increased by more than 700,000 cellular users, up from 10.6 million users in March 2020 to 11.3 million users accessing OTT services at least once in the month of June 2020.
This translates to a growth rate of 7% and can be expected given the high levels of internet usage during the period under review.
Quarterly OTT users in Millions
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11. Revenues
Amidst a global pandemic and associated national lockdowns, the sector showed extreme resilience posting a single digit quarter-on-quarter drop of 7% in revenues. This followed a record quarterly revenue performance of UGX 1.05 trillion in 1Q20. This resilience in light of the extreme economic circumstances is indicative of economy-wide dependence on ICTs and changing consumer expenditure patterns.
If put into global context, the 7% drop in revenue is commendable given that some global carriers reported as much as 20% declines in revenue during the period on the back of the global pandemic.
The biggest revenue shock was in the month of April, posting monthly revenues of UGX 305 billion from UGX 361 billion in March 2020.
The sector seemed to rally with a V-shaped recovery in the months of March to June. May and June posted revenue totals of UGX 321 and UGX 348 billion respectively from an April baseline of UGX 305 billion. The performance in these months translates into a month-on-month recovery of 5% and 8% recovery respectively.
These revenue lines include retail and input/wholesale revenues like Tower Lease sales, International Bandwidth, Mobile Financial Services as well as Voice and Data services.
Section C : Financials
347 349361340 305 321
2% 6%16% 5% 9%
Jan FebMar
AprMay
Jun
(Revenue in Billions)
DropDrop
GrowthGrowth
Growth
Revenue Performance in 2020
Quarter on Quarter Revenue Performance
937 1,048 975
4Q19 1Q20 2Q20
12% 7%Growth Drop
(Revenue in Billions)
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Probably the most affected service was the Voice segment that realised a 16% drop in revenues between 1Q20 and 2Q20. This is in line with global and national traffic contractions during the period.
Quarterly internet revenues grew by more than 23 billion between 1Q20 and 2Q20. This strong performance was bolstered by Work-From-Home broadband demand.
On the other hand, despite increased mobile money traffic and transactions, the sector posted a 12% revenue drop. This drop is attributed to waivers of various mobile money transaction fees during the lockdown, aimed at promotion of contactless payment solutions amidst the pandemic.
12. International Interconnect Position
Total industry monthly revenues from international incoming traffic have averaged 11.3 billion shillings in 2Q20, translating to a 4% increase in average monthly revenues.
Average outbound international interconnect settlements increased by 7%, rising to a monthly average 7.6 billion per month in 2Q20.
During 2Q20, Uganda has posted a positive balance of payments position (BoP) with respect to international traffic settlement, with a net positive position of UGX 10.89 billion. *
Total Mobile Money Revenue
Total Data Revenue
Total Voice Revenue
420
380
340
300
260
220
180
140
100
0
-
-
-
-
-
-
-
-
-
173 174
396
149
213
352
169
190
420
4Q19 1Q20 2Q20
Revenue
Quarterly Performance of Voice, Mobile Money & Data Revenues (In Billions)
In 2Q20, Uganda posted a net positive position of UGX 10.89 billion
International Interconnect Position Apr 20 May 20 Jun 20International Interconnect Revenue
11,073,250,646 11,778,776,290 11,125,050,022
International Interconnect Expense
7,091,617,451 8,186,323,125 7,810,999,279
Net Position 3,981,633,195 3,592,453,165 3,314,050,743
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13. Postal Services
One of the most highly impacted segments was the postal and courier markets, with volume drops across domestic and international mail and parcel categories.
Globally, leading players like DHL, FedEx and UPS have reported drops of as much as 50% in net earnings. In their final quarter 2020 (March – May) performance, global courier giant FedEx reported an adjusted net income of $663 million, well below the $1.23 billion posted in the same period last year5.
Relatedly, Dubai-based logistics firm Aramex reported a 38% decline in its Q1 profits at the onset of the global pandemic.
In Uganda, international mail and parcels reported the highest drops in volume in the months of April, and mail volumes as a whole contracted by 57% between 1Q20 and 2Q20. The market averaged 56,895 mail volumes processed per month during the quarter, compared with 133,289 in 1Q20.
In contrast, the sector witnessed a surge in the growth of business-to-consumer segment as e-commerce flourished amidst the national lockdown. We saw transaction surges in Express Mail Services (EMS) as well as door-to-door parcel delivery services in the months of May and June.
Section D. Postal & Courier
ORDINARY MAIL
Parcels, Registered& Other courier
articles
15,505(37%)
15,139(29%)
21,179(28%)
25,953(63%)
37,317(71%)
55,591(72%)
Apr 20 May 20 Jun 20
TOTAL 41,458 52,456 76,770
Mail Volumes Processed
5 https://www.commercialappeal.com/story/money/industries/logistics/2020/06/30/fedex-earnings-fourth-quarter-covid-19/3278146001/
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14. TV Market
Free-to-Air
The delivery of FTA channels is mainly via the government-owned SIGNET Uganda Limited. By the end of June 2020, 39 FTAs were carried on the SIGNET platform.
Pay TV
The Pay-Tv market in Uganda is served by a combination of satellite, cable and digital terrestrial networks, with 7 licensed content aggregators.
Total active subscribers are at 1.56 million as of June 2020, compared to 1.58 million in the preceding quarter. This translates to a market contraction of 2%.
The sustained contraction in the active pay tv market is likely a consequence of the continued suspension of major sports leagues due to the novel coronavirus. Some of these resumed towards the end of the review period under strict limitations, which bodes well for subscription numbers going forward.
15. Programming
Pay-Tv service providers deliver a range of content on their platforms and the number of channels on a network may vary slightly month to month.
Section E. Broadcast & Multimedia Markets
DSTVZUKU TVAZAM TV
GOTV
KAMPALA SITICABLE
STARTIMES
SATELLITE(Country wide)
TERRESTRIALKampala, Jinja, Iganga,Mbale, Lira, Gulu, Arua,
Kasese, Mbarara, Masaka,Wakiso
CABLE(Kampala and Jinja)
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6%
15%
6%
2%
2Q19
3Q19
4Q191Q20
2Q201,390,485
1,471,214
1,686,269
1,583,8731,556,514
ACTIVE PAY TVSUBSCRIPTIONS
Drop
Growth
Growth
Drop
Active Pay TV Subscriptions
20
Mar
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Bouquet pricing is diverse, with Pay Tv providers offering packages targeted at various market segments.
While bouquets are traditionally billed on a monthly payment basis, some operators are providing bouquet offerings on a daily payment schedule. Such as the NOVA, Classic and Basic daily bundles on the StarTimes
Subscriber numbers by and large vary heavily with price, indicating a high price sensitivity for Pay-Tv content. The cheapest bouquet offerings on average represent 40% of a given service providers subscriber base, while the most expensive account for 13%.
Averageshareofsubscriberbase=40%
Averageshareofsubscriberbase=13%
Basic Bouquet PricesStation Bouquet Price ChannelsDSTV Access UGX 33,000 75SITI CABLE Local UGX 15,000 AZAM TV Azam PURE UGX 10,000 50STARTIMES (Satellite) NOVA UGX 13,000 38STARTIMES (Terrestrial) NOVA UGX 11,000 31ZUKU TV Smart UGX 12,000 53GOTV GOTV Lite UGX 11,000 20
Premium Bouquet PricesStation Bouquet Price ChannelsDSTV Premium UGX 219,000 140SITI CABLE ASiAN UGX 85,000 133AZAM TV Azam PLAY UGX 37,000 105STARTIMES ( Satellite) Chinese UGX 80,000 21STARTIMES ( Terrestrial) Classic UGX 26,000 14ZUKU TV Asia Stand Alone UGX 39,000 29GOTV GOTV Max UGX 39,000 52
Subscription Distribution Across Bouquet
Subscriber Distribution by Bouquet Offering
Bouquet Pricing
Bouquet pricing is diverse, with Pay Tv providers offering packages targeted at various market segments. Subscriber numbers by and large vary heavily with price, indicating a high price sensitivity for Pay-Tv content.
Value Bouquet Prices
Subscriber Distribution Across Bouquet Categories
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61%23%
16%
1Q20 2Q20
Subscriber Distribution by Bouquet Offering
The quarter showed changes in the relative subscriber shares captured by the different bouquet offerings. The cheapest bouquet offerings represented 61% of the average service providers base at the end of June 2020, compared to 40% at the end of March 2020.
This could be indicative of subscribers migrating to cheaper bouquet offerings as the difficult economic context compounded with the loss of sporting content to make more expensive packages less popular.
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tThe tariff plans in the communication sector varies according to the market segments. For the different market tariff plans, please visit the UCC accredited price comparison websites;
www.kompare.ug
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