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09-Dec-99
ITU-SADC Cellular 1
Getting unwiredin East Africa
Michael Minges, [email protected] views expressed are those of the author andmay not necessarily reflect the opinions of the ITUor its Members.
PARTNERSHIPS & RURALTELECOMMUNICATIONS DEVELOPMENTKampala, Uganda 3-5 November 1999
Partnerships & Rural Telecoms, Kampala, November ‘99
Mobile cellular inEast Africa
Kenya
Tanzania
UgandaStart-up: 6/95Subscribers: 26’000Penetration: 0.15%
Start-up: 9/94Subscribers: 38’000Penetration: 0.12%
Start-up: 1992Subscribers: 7’300Penetration: 0.02%
Data at December 1998.
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ITU-SADC Cellular 2
Partnerships & Rural Telecoms, Kampala, November ‘99
Source: ITU.
Mobile growth
0
1
2
3
4
5
6
1996 1997 1998
Telephones per 1'000 people, East Africa *
* Kenya, Tanzania and Uganda
Mobile
Fixed
05
101520253035404550
1996 1997 1998
MobileFixed
New telephone subscribers, East Africa (000s) *
* Kenya, Tanzania and Uganda
50x 6x
Partnerships & Rural Telecoms, Kampala, November ‘99
Source:ITU.
Substitution
4 Quick to implement4 Low connection fee4 Generally little wait
for service4 Functionality
advantages
3
24
35
Kenya
Tanzania
Uganda
Mobile cellular as % of total telephone subscribers, 1998
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ITU-SADC Cellular 3
Partnerships & Rural Telecoms, Kampala, November ‘99
Strategic foreign investors
Mobile ForeignCountry Operator Investor Share
Tanzania MIC Millicom (Luxembourg) 57%
TriTel TRI (Malaysia) 60%
Uganda CelTel Vodafone (UK) 37%
MTN MTN (South Africa) 50%
Telia (Sweden) 30%
Source: ITU.
Partnerships & Rural Telecoms, Kampala, November ‘99
Source: MIC Tanzania.
Prepaid
4 Provides access tothose who might notnormally qualify
4 Accounts formajority of newsubscriptions
4 Operator avoids baddebt
3
11 14
25 30
79%72%
0%
18%
42%
54%
Jun-98
Sep-98
Dec-98
Mar-99
Jun-99
Sep-99
MIC TanzaniaPrepaid subscribers, 000s
As % of total cellular subscribers
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ITU-SADC Cellular 4
Partnerships & Rural Telecoms, Kampala, November ‘99
Roaming
4 Extra revenue source4 Can help spur
regionalintegration
4 Not widelyimplemented
Roaming agreementsTanzania ( Tritel): 4Uganda (MTN): 5Kenya: 0
Note: No Tanzania-Uganda-Kenya roaming!!!
Partnerships & Rural Telecoms, Kampala, November ‘99
Mobile cellular licenses
4How many– How many operators can market bear?
4How long– Time period of license
4How much– License fees will be passed on to consumers
4How about– Coverage obligations– Technology– Scope
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Partnerships & Rural Telecoms, Kampala, November ‘99
Market structure
4 Private sector– Tanzania & Uganda– Kenya from 2000
4 Competition– Tanzania since 1996
– Uganda since 10/98– Kenya from 2000
Cellular market structure
Source: ITU.
Numberof mobileoperators
withlicense or
to belicensed
Kenya
Tanzania�
�
Uganda
�� �
�
Numberof mobileoperators
inoperation
Partnerships & Rural Telecoms, Kampala, November ‘99
Universal access obligations:Coverage4 Coverage typically
limited to majortowns
4 Licenses should belinked to coveragetargets
4 Global mobilesatellites may help
Source: ITU adapted from GSMAssociation.
MTN Uganda: Mobile cellular coverage
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Partnerships & Rural Telecoms, Kampala, November ‘99
Tariffs
4 Still high relative tofixed and comparedto other regions
4 Biggest barrier tomobile access
4 Reasons why– “High retention”– Interconnect charges– Handset & service
provider subsidies
4 Cost based tariff:US$ 15/month Source: ITU adapted from
published operator tariffs.
$41
$51
$33
Kenya
Tanzania
Uganda
Mobile cellular tariffs, 100 minutes, US$, '99
6.6
6.5
1.5
TimesFixedTariff
Partnerships & Rural Telecoms, Kampala, November ‘99
Competition in Uganda
Source: ITU adapted from company information.
Cellular subscribers in Uganda
0
10'000
20'000
30'000
40'000
50'000
60'000
70'000
80'000
1995
1996
1997
1998
'9/99
MTN
CelTel
Forecast
0
10
20
30
40
50
60
70
80
90
1996 1999
CelTel Mobile Tariffs100 minutes per month US$
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ITU-SADC Cellular 7
Partnerships & Rural Telecoms, Kampala, November ‘99
Handsets
4 Factors affectinghandset prices:– Custom duties– Distribution policy
– Subsidies
Partnerships & Rural Telecoms, Kampala, November ‘99
Forecast
Source: ITU.
0
50
100
150
200
250
300
350
400
450
91 94 97 00 03
Fixed
Mobile
0
50
100
150
200
250
93 96 99 2 5
0
50
100
150
200
250
94 97 0 3
Fixed and mobile telephone subscribers (000s)
Kenya Tanzania Uganda
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Partnerships & Rural Telecoms, Kampala, November ‘99
Conclusions
4 Mobile cellularenhances access tocommunications
4 Must not be viewedas service forprivileged
4 Requires regulatoryencouragement toextend access to all
©ITU / A. de Ferron
Partnerships & Rural Telecoms, Kampala, November ‘99
World TelecommunicationDevelopment Report 1999
l Theme: Mobilecellular
l Publication launch: TELECOM ‘99
l Available on paperand PDF
l Website:www.itu.int/ti/publications/
wtdr_99/wtdr99.htm
09-Dec-99
ITU-SADC Cellular 9
