(PHOTO/Courtesy)
KAMPALA — While mobile subscriptions dropped by 11%, internet subscriptions registered subdued growth, leaving mobile money as the standout performer, according to the latest market performance report that highlights the effects of COVID-19 on the ICT sector.
The report indicates that mobile subscriptions dropped from 28.4 million at the end of March to 25.5 million at the end of June 2020.
The 11% customer contraction is the first recorded market reduction in the last two years (i.e. 8 quarters) according to the Uganda Communications Commission (UCC) market performance report covering the second quarter (April to June 2020).
The record contraction, which has the effect of reducing national teledensity from 67% at the end of March to 61% at the end of June 2020, is attributed to, among others, suppressed new demand because of COVID-19 lockdown measures.
Also believed to have caused the contraction in mobile subscriptions is the clean up by one of the leading mobile cellular companies, which rid the register of SMS-only receiving SIMs.
In addition, the closure of retail stores prevented onboarding of new customers to networks, while SIMs held by December [2019] holiday-makers and travellers who usually leave the country in the first quarter were rendered inactive.
Besides, a 13% global reduction in shipments of smartphones was reported, and the resulting disruption in domestic supply chains couldn’t be overemphasised.
As for mobile internet subscriptions, while the numbers understandably failed to keep up with the outstanding first quarter (January-March 2020) performance, which saw more than 1 million internet subscribers added, there was a growth of less than 100,000 new connections.
“This remains noteworthy growth in light of the general contraction in mobile subscriptions and devices,” observed the report, which is based on licensees’ submissions.
The report also highlights the resilience of mobile financial services after 500,000 customers registered for mobile money services during the period under review.
At the end of June 2020, the number of registered mobile money accounts had grown to 25.9 million accounts, up from 25.5 million at the end of March 2020.
This growth translated into a quarter on quarter growth of 2% despite a drop in mobile subscriptions of 11% between March and June 2020.
The market performance report attributes this growth amid lockdown to the revision of mobile money transfer rate cards instituted by the leading mobile service providers.
In March, MTN Uganda and Airtel Uganda implemented a zero charge on person-to-person transactions on the same network. This offer was later revised to a 50% discount on pre-COVID-19 rates.
Mobile money growth between April and June 2020 is also attributed to the increased e-commerce precipitated by limited mobility during COVID-19 lockdown.
There was also 7% growth for OTT subscriptions, which increased by 700,000 cellular users, up from 10.6 million users in March 2020. This refers to users who accessed OTT services (such as Facebook, WhatsApp, Twitter and Zoom) at least once in the month of June 2020.
On the other hand, postal and courier services were among the worst-hit sectors as mail, and parcel volumes dropped both domestically and internationally, the report states. The industry also registered slower delivery and higher delivery expenses.
“In Uganda, international mail and parcels reported the highest drops in volume in the month of April, and mail volumes as a whole contracted by 57% between 1Q20 (January – March) and 2Q20 (April – June),” says the report.
“The market averaged 56,895 mail volumes processed per month during the quarter, compared with 133,289 in 1Q20.”
On the bright side, however, the sector witnessed a surge in business-to-consumer transactions as e-commerce flourished amid lockdown. Express Mail Services (EMS) and door-to-door parcel delivery witnessed higher demand in May and June.
As for pay-TV, total active subscribers dropped from 1.58 million in the previous quarter to 1.56 million in the quarter under review, representing a market contraction of 2%.
This was most likely a result of the suspension of sports activities due to COVID-19 restrictions.
