According to the Uganda Communications Commission (UCC), MTN Uganda and Airtel Uganda together command a market share of slightly more than 90 percent.
To break the duopoly of the two leading telecom players in the country, it would take what telecom sector analysts describe as strategic deployment of capital, infrastructures and innovation. This approach, they say, looks more sustainable compared to trying to out compete or facing the two giants heads on.
For the sector regulator – UCC, a new entrant or an industry player with a compelling value proposition, an innovation-focused business model, and the ability to provide high-quality service and excellent customer experience can steadily capture a portion of the market.
Note that the regulatory framework not only promotes fair competition but also safeguards consumer interests, and for an investor, it ensures a level playing field.
Currently, the two leading sector players appear unbothered by the emergence of a third force on the grounds that competition is ‘a good thing’ for the industry.
Going by the regulator’s assessment, Uganda’s telecom sector is very competitive and experiencing strong growth, driven by not just mobile services and increasing data consumption, but telling developments including the transition to 5G services which comes with speed and quality required for a fast-paced economy.
Nothing is impossible
When contacted, the head public and international relations at UCC, Mr Ibrahim Bbossa, says it is possible to have a third force that can catalyse the sector’s fortune for the better.
Asked if it is possible to dislodge the dominance of the two leading players-MTN and Airtel by another player, a third force, Mr Bbosa says: ‘Yes, it is feasible.’
He continues: ‘Uganda’s telecommunications sector is open to competition, permtting any licensed operator with the necessary technical, financial, and management capabilities to enter and succeed.
‘The dominance of MTN and Airtel mainly stems from their early market entry, robust investment, and extensive infrastructure. Nonetheless, the sector’s profitability, estimated at over Shs700 billion for both operators combined, highlights the market’s strong commercial potential.
However, for a third operator to succeed in becoming a force, the sector regulator noted that it must have sufficient capital and be prepared to invest significantly in network infrastructure and brand building.
‘Entering this market demands a large initial investment, especially for spectrum acquisition, infrastructure deployment, and meeting the quality-of-service and coverage standards established by the Commission.
‘Success beyond capital relies on strategic differentiation through innovation in pricing, data services, customer care, and digital financial solutions. The operator should also pursue aggressive yet sustainable marketing and partnerships that improve customer experience and support digital inclusion,’ Mr Bbosa says.
The UCC persists in encouraging infrastructure sharing, fostering fair competition, and creating a conducive environment for investment. This should ensure that any credible new entrant can compete successfully and help grow the sector.
The market dominance of major players like MTN Uganda and Airtel Uganda has not deterred the resolve of some sector players like Lyca Mobile who are looking to become the force to reckon with overtime. Currently, they are going about their operation almost unnoticed but steadily building their presence in the market over the last five years.
‘We have invested over $150 million over the last five years and we are looking to inject more in the next five years,’ said the Lyca Mobile chief financial officer, Mr Emmanuel Zinabala, demonstrating their seriousness in the domestic market.
Already Lyca Mobile in Uganda is among the large taxpayers bracket according to Uganda Revenue Authority (URA) classification.
With about 300 sites – a location that houses the equipment necessary for wireless communication, and looking to increase market share from currently close to 3.5 percent to 15 percent in the next phase of their growth and development, Lyca Mobile is banking on its pricing model to achieve that target before reassessing their progress in the next five years. This is perhaps why, alongside the expansion strategy that will see another injection of $27 million in coming months, explains why the mobile network operator has launched the Supa SIM at no cost to customers – exhibiting their potential to go toe-to-toe with the big players.
Investing in technology, customer
Playing by the regulator’s book, the telecom operator is not taking a chance with technology.
‘We have something for everyone. In an ever-changing digital world, Lyca Mobile strives to connect people, wherever they are,’ says Mr Vikram Lal, Lyca Mobile chief marketing officer, Africa.
According to Mr Arvind Kakkar, the chief operations officer, Africa, investment is already lined up for proper investment in technology and to deepen the telecom presence in all the districts in Uganda.
The telecom company is also 5G ready and it will not be long before they launch their version of mobile money as they consolidate their data niche and make inroads in voice.