The Uganda Communication Commission (UCC) has released its market performance report, reviewing the industry performance, trends, and key developments for the second quarter of 2021 (2Q21) starting April to June 2021. The report covers; Outlook of the Global Telecom Market Place, Highlights in Uganda’s Telecom Industry, Service Access, Traffic & Usage, Industry Revenues, Post & Courier Services, and Multimedia & Broadcasting Market.
Highlights from the report;
1. e-Health startups hit Covid-driven purple patch
Following the outbreak of the Covid-19 Pandemic, the biggest movement in the local tech ecosystem has been the growth of e-Health platforms that launched a range of services fueled by an overwhelmed health care system and travel restrictions.
With all these restrictions and Covid-19 SOPs, e-Health platforms began offering remote services, including; over-the-phone consultations & counseling, diagnosis, lab sample collection, home tests, and prescription delivery, among others.
With the rise of e-Health startups, medical institutions and local medical insurance firms began partnering with these e-Health platforms like Rocket Health, Venro Health, Mama Ope, ClinicMaster, Matibabu to offer remote services. According to the report, at the end of June, more than 10 local insurers had started extending health insurance coverage through various e-health startups.
2. Sector Tax Amendments
The quarter saw a host of sector tax amendments in the new financial year (FY 2021/22) that among others included the end of Local Excise Duty on Over-the-Top Services, the introduction of a new Excise tax for data services, and the revision of VAT on telecom Value Added Services.
The table below highlights the tax for FY 2020/21 and FY 2021/22;
|Item||Tax type||FY 2020/21||FY 2021/22||Comment|
|All products except Mobile money||VAT||18%||18%||Maintained|
|Mobile money fees||VAT||Exempt||Exempt||Maintained|
|Exports of Communication Product and Services||VAT||Zero-rated||Zero-rated||Maintained|
|Incoming International Call Services||Excise duty||9 cents (USD$ 0.09) per minute||9 cents (USD$ 0.09) per minute||Maintained|
|Prepaid Airtime||Excise duty||12%||12%||Maintained|
|Postpaid Airtime||Excise duty||12%||12%||Maintained|
|Value-Added Services||Excise duty||20%||12%||Reduced|
|Money Transfer & Withdrawal Services (Except by Bank)||Excise duty||15%||15%||Maintained|
|Internet data except for data for the provision of medical services and Education services||Excise duty||NIL||12%||New|
|Commission for airtime distribution and provision of mobile money services||Withholding tax||10% of the gross amount of payment||10% of the gross amount of payment||Maintained|
|ICT Devices||Import Duty||10%||10%||Maintained|
|Chargeable Income (Profits)||Income Tax/ Corporation tax||30%||30%||Maintained|
3. Fixed and Mobile subscriptions growth
Fixed and mobile subscriptions grew by more than 600,000 new subscriptions maintaining the 2% quarter-on-quarter growth posted in 1Q21. The growth in subscriptions translates into a national telephone penetration of almost 7 lines for every 10 Ugandans.
On a year-on-year comparison, the growth translates into 3.5 million new telephone lines between June 2020 and June 2021.
4. Broadband subscriptions growth
A total of 352,000 new broadband subscriptions were recorded. The Commission notes that the growth in broadband subscriptions is likely organic with unique new users that match the number of new smart gadgets connected to the network during the period.
On a year-on-year comparison, there were 3 million new broadband subscriptions in the 12 months ending June 2021. The Commission reports that the growth was largely fueled by Covid-19 occasioned travel restrictions, work-from-home, and study-from-home protocols.
5. Network Devices and terminals
There were 32 million terminals connected to public communication networks at the end of June 2021. This is a net addition of 900,000 new gadgets and quarter-on-quarter percentage growth of 3% in the three months April to June 2021.
On a year-on-year comparison, active devices connected to the networks grew to 32 million devices in June 2021. This is 2.7 million new devices connected to the network in the 12 months ended June 2021. The total number of smartphone/internet-enabled gadgets connected to the networks stands at 9.7 million gadgets while the count of feature phones and basic phones connected to the network had grown to 22.4 million at the end of June 2021.
6. Mobile Financial Services and Subscriptions
At the end of June 2021, 800,000 new mobile money accounts were registered which saw the number of accounts rise to 31.3 million from 30.5 million at the end of 1Q21. On a year-on-year comparison, a total of 5.4 million new mobile money accounts were registered in the 12 months ended June 2021.
The number of mobile money access points also grew by 30,000 new accounts in the months of April to June 2021. The growth in mobile money agents is in part fueled by the increased onboarding of mobile money services by previously stand-alone bank agents. These now double as bank and mobile money agents.
15.8 billion minutes of domestic traffic were posted from April to June 2021. This is
a combination of intra and inter-network traffic in the country. Of this total (15.8bn), 15.7 billion were minutes originated and terminated on the same network while 156 million were called minutes between two domestic operators. The growth in traffic translates into an average of 183
domestic minutes of talk per month by an average subscriber during the period under review.
The market also posted a total of 127 Million international minutes from April to June 2021. Of 127 million, 87 Million were international incoming minutes while 40 million were international outgoing minutes. From the same 127 million, 42.5 million minutes were either traffic from or terminating within the One Network Area partner states of Kenya, Rwanda, and South Sudan.
Meanwhile, the sector recorded total internet traffic of 69 billion MBs (downloaded or uploaded) from the internet. This is an 11 billion MBs growth from the 58 billion MBs downloaded in 1Q21. The growth in traffic during the period translates into an average of 803 MBs per user per month during the period.
8. Industry Revenues
The industry has maintained a trillion gross revenue mark in the last 4 quarters. In terms of a year-on-year comparison, the industry gross revenue grew from UGX976 billion to UGX1.11 trillion between 2Q20 and 2Q21 translating into a 14% growth. According to the Commission, the gross revenue excludes mobile money revenues for the month of June 2021 following the structural separation of the GSM and mobile money operations within the quarter.
Revenues generated from the mobile voice services continue to dominate with a 42% contribution to the total gross revenues within the quarter ending June 2021.
9. Postal and Courier Services
Courier service access became more digital to address the dynamic customer needs and preferences effectively. Various companies launched apps to ensure safe and just-in-time delivery services. The introduction of an open Track and Trace portal on the websites of most operators like DHL, Skynet, Aramex, that translated into growth in business.
In order to remain afloat, Uganda Post Limited also introduced an innovative business strategy
dubbed the virtual Post Office (PO) Box. The virtual box was launched to boost the traditional physical mailbox stationed in different postal locations. The electronic mailbox system has enabled digitization of the Post Office Boxes attracting the tech-savvy Ugandans to acquire virtual PO Boxes. This service enables customers to receive notifications upon receipt of physical mail, permits track and trace services as well as physical addressing using the Global Positioning System (GPS).
On the hand of mail traffic, The domestic mail volume grew to 66,215 mails from 37,151 mails in 1Q21, translating into a 78% quarter-on-quarter growth. This growth is partly attributed to the emergence of the ePosta service as well as the current domestic fleet owned by most courier operators like DHL, Godel, SGA, Nation courier, S-M Cathan Logistics, Sail Courier, and UPL.
The Expedited Mail Service (EMS) – Outbound international Mail volume grew from 1,683 mails in 1Q21 to 2,026 mails in 2Q21, translating into a 20% growth. On the other hand, EMS -Inbound international Mail volume grew from 1,021 in 1Q21 to 1271 mails in 2Q21, registering a 25% increase.
10. Multimedia and Broadcasting Market
The was an increase in the total active subscribers from a total of 1.49 million as of March 2021 to 1.6 million in June 2021. The growth in pay-tv subscriptions is seasonal relating to the resumption of major sports leagues which was expected to kickstart the subscription numbers.
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