For the first time that total Internet subscriptions in Uganda have crossed the 20 million mark, suggesting that nearly one in every two Ugandans has Internet access according to the latest communications Market Performance Report by the Uganda Communications Commission (UCC).
During the quarter under consideration, broadband cellular subscriptions grew by 1.2 million connections from 18.9 million at the end of June 2020 to 20.1 million at the end of September. This is coming on the back of the disruption occasioned by the COVID-19 lockdown from March to June shows significant recovery, which cuts across all major market segments.
UCC says that this growth is mainly attributed to the shifting work culture driven by the COVID-19 pandemic, which led many businesses to adopt remote working methods, says the report covering July – September 2020.
In the same vein, there were more than 1 million new mobile subscriptions in the months of July, August and September 2020 as the market topped 26.5 million fixed and cellular subscriptions, equaling the pre-COVID-19 subscriber count of December 2019.
Having dropped from 28.4 million in the first quarter (January – March 2020) to 25.4 million in the second quarter (April to June 2020), mobile subscriptions recovered to record 26.5 million at the end of September 2020.
In terms of year-on-year comparison, the sector posted a 3.3% growth in subscriptions between September 2019 and September 2020, despite the 3 million subscriber erosion between March and June 2020 at the onset of the COVID-19 pandemic.
“Amid the sector-wide disruption over the last six months, the sector averaged quarter-on-quarter growth rates of 1% over the last 12 months. This comparatively subdued performance is largely attributed to the 11% subscriber drop in the months April-June 2020,” the report stated.
The current subscription figure translates into a national telephone penetration of 64 lines for every 100 Ugandans.
At 1.8 million newly registered accounts between June and September, mobile financial services led industry-wide product growth, jumping from 25.9 million subscriptions at the end of June 2020 to 27.7 million at the end of September 2020.
Mobile Money Growth
Besides, the Ugandan mobile money landscape continued to present a high conversion rate from registration to account activity. At the end of September 2020, 81% of all registered money accounts had partaken in at least one billable mobile money transaction in the 90 days preceding September 30, 2020. This translates into a 7% quarter on quarter growth in active wallets.
New subscriptions mainly led the growth in the period under review in contrast to reactivation-led growth witnessed in the period April-June 2020. This observation is significant given the number of first time mobile financial service users in the market.
However, the report points out that the growth in mobile financial services came along with consumer protection challenges, with new consumers especially being susceptible to fraudulent schemes orchestrated by both unscrupulous individuals and agents.
This realisation is in line with market research conducted by Uganda Communications Commission (UCC) and Innovation for Poverty Action (IPA) in the period 2019-2020, which showed that more than 40% of customers surveyed reported a money-related consumer challenge. This ranged from agent overcharging, unclear/unexpected fees to incorrectly sending money. Moreover, 61% of the consumers surveyed took no initiative to seek redress.
ALSO READ: UCC finally inks pen to paper on MTN Uganda’s 12-year Operating License
During the quarter under review, MTN Uganda, having complied with the new licensing regime obligations, was successfully migrated and issued with a National Telecommunications Operator (NTO) license in July 2020.
This followed extended industry consultations towards revising the national telecommunications licensing regime in Uganda that led to UCC issuing a new licensing framework.
