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title: Stable growth points to a bright future for Uganda’s telecom sector - Developing Telecoms
description: Uganda is one of the fastest and most consistently growing economies in Africa. Fibre, mobile broadband and mobile banking are revolutionising the country’s telecom sector
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date: 2015-01-06T15:49:19Z
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Uganda is one of the fastest and most consistently growing economies in Africa. Fibre, mobile broadband and mobile banking are revolutionising the country’s telecom sector...

Uganda is one of the fastest and most consistently growing economies in Africa. Fibre, mobile broadband and mobile banking are revolutionising the country’s telecom sector, according to Research &amp; Markets. Uganda’s first mobile network was launched in 1995 by Celtel/Zain (now Bharti Airtel), and was followed by MTN in 1998, Uganda Telecom in 2001, Warid Telecom in 2008 and HiTS Telecom, in which France Telecom's mobile unit Orange bought a majority stake in 2009.

The intensified competition has led to a price war which has accelerated subscriber growth, but has also led to the fall of average revenue per user (ARPU). However, with market penetration still well below the African average, hundreds of millions of US dollars are being invested into new infrastructure.

The operators started to increase their tariffs again in 2011 and at the same time are trying to find ways of generating additional revenue streams. Mobile data and 3G broadband services as well as mobile money transfer and m-banking services are at the forefront of this development in a country where less than 20% of the population currently has Internet access or holds bank accounts.

A simplified and converged licensing regime has significantly reduced barriers to market entry and increased competition. MTN also competes with Uganda Telecom in the fixed-line market. Penetration is low in this sector but has seen a renaissance recently on the back of wireless local loop (WLL) network rollouts, prepaid services and an increasing demand for broadband access. 3% of fixed lines are using fibre for the last mile.

Being landlocked, the country depended entirely on satellites for its international Internet connectivity until 2009 when several international submarine fibre optic cables landed on the African east coast, to which Uganda is now connected via a national fibre backbone extending to its borders. By 2010, prices for international bandwidth had plummeted to a fraction of their original cost. In parallel, wireless technologies such as WiMAX and 3G mobile services have brought the Internet within reach of a much wider part of the population than the limited fixed-line DSL services ever have. These improvements in infrastructure will revolutionise the market by making broadband access more affordable and enabling converged voice, data and video/entertainment services.

With GDP growth forecast to remain stable at around 7% per annum until at least 2016, growth prospects for Uganda's telecoms sector are excellent.

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