MILKING UGANDANS! How love for profits forced MTN bosses to abandon popular ‘MTN Kampala Marathon’

MTN Uganda has decided to do away with popular annual event ‘MTN Kampala Marathon’ effective this year.

They say something new and exciting is in the kitchen cooking.

“As we embark on our mission to set new standards of excellence, we are taking a step back to realign our vision and innovate around how to distinguish ourselves and become more impactful for the years to come. We will therefore not be having the MTN Kampala Marathon this year but will soon announce the next transformative chapter in this remarkable journey that we have all come to cherish. MTN Uganda remains steadfast in its commitment to championing the passions of Ugandans, as the leading sponsor of various initiatives that enrich the lives of our people,” MTN said last month.

This event has been a money making avenue for Ugandans whenever it was held.

Talk of running kits makers and contractors, water and juice sellers, events management services (tents, music, stage etc), event’s advertising revenue going to media houses, winners’ cash prizes and among others.

And more so, money collected from this event has always funded various causes like bolstering and boosting maternal and children health, constructing or renovating schools, hospitals, extending safe water and among others—all to the benefit of Ugandans.

All this is no more: Reason?

This publication has learnt that the decision to abandon the annual MTN Kampala Marathon is all about profit maximization. The Ugandan unit of South Africa’s MTN Group (MTNJ. J)  recently reported a profit of Sh325.6 billion shillings ($90.29 million) for the first six months of 2023.

This time, the bosses in South Africa and Ugandan tycoon Mbiire (who reportedly has about one percent shareholding) also need the small money which MTN has been using to organize this marathon in terms of profits.

Insiders told us that MTN bosses must milk Ugandans at all costs and new Chief Executive Officer Sylvia Mulinge has been well briefed on this.

We have now learnt that in the grand scheme of things, scaling back on Corporate Social Responsibility (CSR) initiatives where MTN has been injecting a fraction (not even one percent) of its revenue is one of the priorities. MTN Kampala Marathon is the first casualty.

Uganda’s telecom sector observers opine that MTN is intentionally doing this because they feel they have done it all to capture the Ugandan market and hence no need of dishing out more freebies to customers to woo or retain them.

Since 2007, MTN has been dedicating a percentage of their profit to CSR through the MTN Foundation to extend hope to those in need. Call it giving back to the community. Focus has been to strategically improve 4 thematic areas that include Youth, Health, Education and ICT.

It is this giving back to the community or CSR initiatives budget that the bosses are targeting.

“Simply said, MTN has almost no competition. MTN is swimming in money. They want to keep it,” analysts opine stressing that this explains why MTN no longer sees a reason to continue big time things like the annual MTN marathon which can affect their profit margins.

This also further explains why MTN is no longer spending on advertising.

“Advertising revenues have been part of the give back to the community. But is now retained and repatriated as profits to the mother country,” analysts further observe.

Observers further stress that MTN bosses stopped spending or investing anything in Uganda the moment they listed  22.4 billion ordinary shares on the Uganda Securities Exchange (USE), which gave Ugandans a sense of ownership whereas not as more than 80 percent of profits are repatriated.

Whereas, according watchers, Airtel Uganda would have forced MTN to increase its visibility through investing in local advertising, spending on CSR activities and among others, the former also no longer advertises big time because they are conformable being Number two.

“Most Ugandans if not all, atleast each of them has a second line in Airtel. If Airtel is not into big things, MTN will always scale back,” observes one of the industry analysts and adds: “If you have MTN and Airtel not spending and scooping profits back home it impacts the economy in the long run.”

This publication has learnt that this explains why the government is revamping Uganda Telecom to give the two bloody noses.

“There is a need for a third serious competitor in the industry. At the moment they are not under any pressure to spend but to repatriate profits only.”

We are told this is the same strategy being adopted by foreign banks like Stanbic, Standard chartered and others but this is a story for another day.

Participants at the recent MTN Kampala marathon

UGANDANS NOT HAPPY WITH TELECOMS

Whereas Ugandan Telecoms continue to swim in huge profits which foreign owners even repatriate back home, Ugandans are not happy. Ugandans feel these telecoms can do much more than deploying their PR machinery and CSRs to cover up. Members of Parliament have urged them to adopt more friendly data and voice bundles.

This, according to the MPs, is intended to ensure that consumers of communication services get quality, reliable and affordable communication services to widen Information Communication Technology (ICT) penetration as a key driver of economic growth.

While chairing the House on Wednesday, 13 July 2022, Deputy Speaker Thomas Tayebwa tasked UCC to engage these companies to exclusively provide unlimited data and voice call bundles that do not expire.

“This issue of expiry of data and voice bundles needs to be addressed. How do you tell me that bundles have expired? Technology has no expiry date. In many countries, one is only required to reactivate the bundle; it’s like money on your account where the bank tells you that your account has become dormant, it is then reactivated and you can access your money,” Tayebwa said.

He also urged UCC to direct telecom service providers to remove interconnection fees that have created unhealthy monopolistic tendencies, making it costly for subscribers to make calls across other networks.

Ugandans continue to pay heavily in their bid to access telecommunication services characterised by dropped calls, exorbitant rates on data bundles, unrealistic consumption patterns and expiry of internet bundles among others.

There are also issues to do with cyber security where unscrupulous people are swapping customer’s sim cards and using them for fraudulent and heinous acts. Many Ugandans especially MTN subscribers have lost huge sums of money on the hands of these people who collude with insiders.

Poor network especially both in and outside Kampala is also another challenge—both internet and calls. Dropped calls are the order of the day and yet they are charged, a matter minister Frank Tumwebaze has been lamenting about.

Circumstances that also saw outgoing MTN CEO Wim Vanhelleputte and other executives— chief marketing officer, Olivier Prentout, Annie Bilenge Tabura, the general manager for sales and distribution and Elsa Mussolini, the head of the company’s mobile money business deported made Ugandans lose confidence in MTN. Ugandans feel something was fishy and is yet to be solved.

Ugandans are also not happy with Airtel’s unfriendly mobile money transactions. For instance it’s easier for MTN line owners to authorize mobile money withdrawals in favor of a recipient who is very far away from them than is the case with Airtel.

Some users also prefer using Airtel Money because of its favorable terms when it comes to borrowing –Quick loan and wewole for Airtel—compared to MTN’s Mokash and Mo-sente whose limit is ever low and with a lot of bureaucracy.

For Airtel Wewole they say even if repayment is delayed, they will not demand menacingly. Yet you can also keep using Airtel money for transactions. You can spend even a year and they won’t bother you. “But for MTN hooo. They will deduct the money automatically once payment is due. If you don’t use MTN money, they will bombard you with messages and calls. They even threaten to reduce your loan limit on top of reporting you to the Credit Reference Bureau and being denied loan by other lenders. I have no kind words for them,” one user told this publication.

There has also been the issue of dealing with agents. These are franchise partners involved in facilitating mobile money transactions on behalf of these telecoms.

A section of Ugandans are not happy with Airtel’s restrictive nature. Whereas the MTN model encourages large sized franchise agents, whereby Mbiire/Bitature’s Simba Telecom can galvanize the whole of Buganda region as Minister Okello Oryem’s Tabley Telecom does the entire Northern, in the Airtel’s case the franchise market is too fractured.

And the idea is to avoid a situation where one franchise partner becomes too powerful so as to threaten the powerful Indian expatriates calling shots at Airtel Uganda as they take all profits. That is how Airtel has 137 franchise partners covering the same Uganda-wide market where MTN has only 12 larger ones.

It’s only Keswawal, a wealthy trailer-owning Indian with a big presence in the transport and logistics sub sector, who the influential Indians at Airtel Uganda have allowed to loam large and have a significant geographical mobile money market under his franchise partnership. He is their great guy not only because he is personally well known to the Group global owners back home in India but also because he one time contributed Shs10bn towards resolution of a staff crisis that was imminent at Airtel.

Shs10bn was required and this dude stepped forward to do the needful, a thing that strengthened his relationship not only with Airtel Uganda but globally. As a result, the whole of Nakasero market territory has been preserved for his franchise partnership as has been the case with Jinja, Wakiso, Lungujja, Natete and the Entebbe neighborhood. It’s from this expansive territory that he makes up to Shs270m in commission per month at a time his other contemporaries are netting at between Shs4 and 10m.

Also a close friend of Annit Kapul, Keswawal keeps between Shs5bn and 10bn invested in his Airtel money franchise dealership at any one point in time.

Tycoon Mandela is one of the newest entrants into the Airtel franchise partnership dealings and his entry has equally created some uneasiness in some quarters with some stakeholders perceiving this as an attempt to crowd out native Ugandans more…DEAR READER, NOW THAT YOU ARE HERE, DO YOU HAVE A HOT STORY YOU WOULD LIKE US TO PUBLISH?…FRAUD IN BANKS, TELECOM FIRMS, BETTING FIRMS, CHEATERS, DIVORCE FILES, SEX NETWORKS, SEX FOR MARKS, HARASSMENT OF ALL NATURE AT OFFICE BY YOUR BOSS, CHILD NEGLECT, WETLAND OCCUPATION, ENVIRONMENTAL DEGRADATION, VIDEOS, IMPUNITY or CORRUPTION (in government agencies/ MDA’s, NGOs, Ministries, Private sector), FIGHTS IN OFFICES, JOB WARS/ WITCH HUNT, URA TAX FRAUD/NON-COMPLIANCE, CHEATING MONEY LENDERS, BUSINESS WRANGLES, SUBSTANDARD PRODUCTS, GOLD SCAMS, NSSF REMITTANCES NON COMPLIANCE, LAND ISSUES, INTERNAL AUDIT REPORTS EXPOSES, POLITICAL WRANGLES…ETAL. CALL/TEXT/WHATSAPP 0777959024 OR EMAIL: redpeppertips@gmail.com WITH AS MUCH EVIDENCE AS POSSIBLE. SOURCE PROTECTION/CONFIDENTIALITY IS OUR NO.1 PRIORITY.

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