MTN Uganda Expects Double-digit 2014 Revenue Growth

MTN Uganda, the local unit of South African telecoms giant MTN Group, expects its 2014 revenues to grow by 10 to 12 percent, boosted by its mobile money and data businesses, the chief executive said on Thursday.
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Chief Executive Mazen Mroue told Reuters the Ugandan unit planned to spend 150 billion shillings ($72.4 million) this year to expand its high-speed internet infrastructure, underpinning its focus on the data market.

Uganda has seven telecom firms serving its population of 34.5 million people, according to industry regulator Uganda Communications Commission. The economy, now growing at about 6 percent a year, has expanded strongly in the past decade.

“Our revenue projection is to continue growing in double digits,” Mroue said. “We’re talking between 10-12 percent overall growth in 2014 from 2013.”

“Specifically internet infrastructure and mobile money financial services, those are the two areas that are continuing to support our growth in addition to our traditional voice service,” he said.

MTN Uganda, the leading provider, estimates that it controls 55 percent of the market and expects its mobile subscribers to hit 10 million by the end of 2014 from 9.5 million in March.

“In 2014, we have an aggressive plan … to increase our 3G and 4G sites coverage across the country to be able to continue accommodating the increased demand (for) internet access.”

MTN expected to expand the number of data subscribers to 3 million by the end of 2014 from an estimated 2.6 million at the end of last year, he said.

Mobile penetration in the Ugandan market stands at about 44 percent, offering room for mobile providers to expand fast although competition has eroded margins since 2010 and encouraged some players to sell up.

India’s Bharti Airtel purchased Warid Uganda, then the country’s No.3 biggest operator, while last month French telecom’s giant Orange said it would sell its majority stake in Orange Uganda to Africell.

Mroue said MTN Uganda’s Average Revenue Per User (ARPU), a key industry standard, has hovered between $3 and $4.5 since 2010 when competition picked up, from about $6 before.

The market could not support more than three operators, he said. “This market is quite good … to accommodate two operators,” he said. “More than three (and) it will be a complete loss.”

By Elias Biryabarema for Reuters

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