Digital economy: Airtel Uganda’s role in the transformation of the telecom sector

Portrait of V.G Somasekhar
V.G Somasekhar, the managing director of Airtel Uganda. Photo: Courtesy

The telecommunication industry in Uganda has registered tremendous growth over the past decade, both in terms of increasing teledensity and expanding networks countrywide. This is due to good stewardship by the regulatory authorities and a conducive environment by the government of Uganda, which has liberalized and promoted competition while attracting investment in the sector.

As a result, ICT in Uganda is a vibrant industry with vital infrastructure driving economic and social transformation.

According to the Uganda Communications Commission telecom market performance report 2020, the industry posted a26.7 million subscribers at the end of December 2019. The growth in subscriptions translates into a penetration of 66 Lines per 100 i.e. 66% teledensity, of which 97% of total subscriptions remain mobile, while 3% are fixed. In Uganda, it’s not a mobile first strategy but a mobile only strategy.

The report further notes that at the end of December 2019, the number of active smartphones had grown to 6.6 million, which means that smartphone penetration is under 25%. This relatively low penetration is due to the slow migration from feature phones to smartphones.

Reflecting on the last 10 years of Airtel in Uganda, I would like to share my perspective on the key trends and changes in the sector.

Competition and consolidation

The telecom sector remains highly competitive, achieving the objectives of the government in a liberalized sector by driving innovation and investment through competition.

Globally, the telecom industry is consolidating to achieve economies of scale and the ability to invest in the ever-changing technologies of 2G, 3G and 4G with fibre optic networks to enable high capacity and high-speed data networks.

In Uganda, we have seen an industry consolidation led by Airtel through the acquisition of Warid to build scale and a robust network. The separation and hiving of telecom towers to tower companies have unlocked precious capital for investment in wider coverage and access technology.

Airtel’s sustained investment and innovation have led to a strong competitive telecom sector in Uganda, unlike the monopoly and dominance seen in Kenya, Ghana, Rwanda and many other African markets.

From the central region to countrywide

It is often said 80% of Uganda’s economy is within 80 kilometres of Kampala. The Kampala metropolitan area drives the country’s economic activity and has its largest concentration of customers. This is partly due to a delay in the development of physical and social infrastructure across all regions and districts.

Airtel has played a pivotal role in expanding and modernising the telecom networks across all 127 districts, 211 counties, 14,66 sub-county and 7,434 parishes serving nearly 97% of Uganda’s population. With high-speed internet access available across Kalangala, Kiboga, Kaberamaido, Katakwi, Kaabong, Kotido, Kanungu and Kiryandongo, the urban-rural divide has been removed.

Convergence: voice to data

The most significant change in the last decade has been the transformation of telecom networks from voice to data, and from data to digital. Airtel has pioneered this initiative, first achieving 100% 3G connectivity and following this up with 100% 4G LTE across all its sites.

Uganda is among the few nations globally to achieve the milestone of a fully modernized telecom network. Airtel’s investment has made it possible for “data, the new oil” to be available across the country.

Digital transformation

The telecom industry provides the infrastructure and connectivity critical to achieving digital transformation. One of the notable digital transformations in the sector is the removal and replacement of airtime scratch cards with electronic airtime. This change has removed the messy, non-biodegradable scratch cards that were polluting the environment and ushered in a fully electronic airtime top up solution.

In addition, the registration of customers is now fully digitalized, supported by an online National Identification and Registration Authority (NIRA) verification. This has made it possible for a new SIM registration or replacement to be completed within 5 minutes at any of the authorized outlets.

Further, Airtel Money has not only banked the unbanked, but continues to drive financial inclusion at the bottom of the pyramid.

Compliance, partnership, and giving back

In the last ten years, Airtel has emerged from a loss-making enterprise to a sustainably profitable one. The DNA of Airtel is one of compliance and respect of the local laws of the land.

Airtel has been widely recognized for its compliance and is seen as one of the partners helping the government to achieve the objectives stated in the National Broadband Policy. Airtel’s partnership with the Buganda Kingdom and FUFA has led to the growth of the Uganda Cranes, connecting with and winning over the hearts and minds of Ugandans.

Covid-19 and resilience

The Covid-19 pandemic has impacted each and every one of us. Life priorities have been redefined with the pecking order of essential requirements food, clothing, shelter and smartphone. Airtel and other telecom networks role as an essential service provider is clearly seen in helping with business continuity planning for the nation and protecting and powering people digitally.

As a long-term investor with the single largest foreign direct investment from India to Uganda, Airtel has so far invested $850 million in the development of Uganda’s ICT sector with leading-edge and world-class infrastructure.

Airtel Uganda has also established and brought to Uganda a strong portfolio of global technology partners. These strategic partners include Mahindra Comviva, Huawei, Nokia, ZTE, Google, Facebook, ATX and Ison Technology, and have each contributed to the technological development of Uganda. This has helped complement the government’s initiatives in increasing broadband access and coverage across the country.

The Government of Uganda launched the National Broadband Policy aimed to achieve the aspirations of the Uganda Vision 2040 by supporting the objectives of the National Development Plan (NDP II) whose theme is “Strengthening Uganda’s Competitiveness for Sustainable wealth creation, employment and inclusive growth”. The policy emphasizes the role of broadband internet in the socio-economic transformation process as a critical enabler. The policy is made a reality through Airtel’s investment and modernisation program.

As we celebrate 10 years in Uganda, we believe that by working together with local communities, suppliers, governments, consumers and beyond, we can transform Uganda and prepare it for the 4th Industrial revolution.

The writer is the managing director of Airtel Uganda.