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Status of the Communications Market – March 10

Status of the Communications Market – March 10. The Telecommunications Sector at a Glance . The Macro Performance . Consumer Price Index Annual inflation dropped to 7.5% from 11% in the previous quarter.

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Status of the Communications Market – March 10

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  1. Status of the Communications Market – March 10

  2. The Telecommunications Sector at a Glance Jan – Mar 10

  3. The Macro Performance Consumer Price Index • Annual inflation dropped to 7.5% from 11% in the previous quarter. • The drop in overall inflation was primarily the result of price drops in food and clothing following the Christmas peak during the preceding quarter. • In the transport and communication sector, CPI dropped to 9.3% from 12 % in the previous quarter . The increase in competition in the sector has had a downward push on telecommunications prices in the country. Jan – Mar 10

  4. Macro Performance Conti. Tax Contribution • Shs 55 billion was realised in the tax revenue during the period Jan – Mar 2010 compared to Shs 39 billion collected during the same period 2009. • The tax comprised of; - Shs 23.8 billion in Excise - Shs 25.7 billion in VAT - Shs 5.7 billion in PAYE A reduction in underlying prices for telecommunication services has resulted into more usage and revenues for government, underlying the positive correlation between price and uptake of service. A reduction in the usage tax(currently at 30% )should generate more volumes of usage and consequently yield higher revenues for Government. Jan - Mar 10

  5. Macro Performance Conti. • Total turnover from the sector (Post and communications) increased by 14% to 1.2 trillion shillings during the year 2009. • This is a slow down compared to 2008 when turnover rose by 24%. • Operators are driven to lower their prices as the market gets more competitive. This is consequently having a squeeze on their margins and therefore the ability to grow their revenues. Jan - Mar 10

  6. Revenue Contributions per Service • Mobile voice services (Prepaid and post paid) dominated gross earnings accounting for more than 50% of turn over. • There was jump in revenues from data and internet services, accounted for an estimated 15% of gross earnings. • The commendable growth in the growth of data services is the result of increased mobile data penetration enhanced by the introduction of 3G data services by the all the telcos. • International access via the high capacity fibre link networks at the East Africa coast is facilitating growth of data market in Uganda Jan – Mar 10

  7. Communications Infrastructure Private Sector Initiatives We predict that future additions in BTS shall be in the form of in house coverage boosters as opposed to the traditional mast mounted antennae • Consistent with the previous two quarters, there has been a contraction/ slowdown in the roll out of BTS as infrastructure sharing takes root. • Sharing is however still primarily limited to passive network elements with no known sharing of active elements to date. • By March 2010, only 10 BTS were added making it a total of 2890 BTS country wide. Jan - Mar 10

  8. Fixed Telephony Market Fixed Subscriptions • There has been a resurgence in the fixed line market over the past two quarters of December and March 2010. • A total of 30,555 new fixed line connections were registered during the two quarters. • This growth has resulted into a national fixed line penetration of 0.77 lines per 100 persons. Jan – March 10

  9. Fixed Line Distribution • Like in the preceding quarter, new growth in the fixed line market is predominantly in the form of fixed GSM and Wimax Terminals • By the end of March, Fixed cellular terminals accounted for 39% of total fixed lines compared to 36% market share at the end of 2009 • CDMA and Copper wire line share of the fixed line market is at 37% and 27% respectively. Jan – Mar 10

  10. Mobile Subscriptions • 608,971 new mobile subscriptions were realised in the first quarter of the 2010. • This translated into a quarter to quarter growth of 6.5% compared to the sub zero growth of -1.3% realised in the preceding quarter. • The increase in number of subscribers translates into a cellular network penetration of 31.4% lines per 100 persons. Jan - Mar 10

  11. Mobile Subscriptions Vs Penetration It is worth noting that mobile penetration has fluctuated at 30% over the past year with no significant changes as witnessed in the previous years. This may be a sign of market saturation in mobile market or may necessitate for a trigger to revamp the market. Jan - Mar 10

  12. Subscription Growth and Penetration rates Jan - Mar 10

  13. Traffic Trends • The industry realised a 29% increase in domestic and outgoing international traffic combined for fixed and mobile voice services. • This is Commensurate with the increase in mobile and fixed subscriptions as well as a reduction of prices for these services. • On net traffic still accounts for the lion share of domestic traffic at 88%, a reflection of the current pricing structure where calling on net is considerably cheaper than calling off the network. Jan – Mar 10

  14. Traffic Distribution Jan – Mar 10

  15. SMS Traffic • There was a growth in SMS traffic of 28% in the first quarter of 2010. This was largely due to the increased SMS usage campaigns by cellular operators. Growth in the previous quarter had been only 4% • On net SMs again dominated the SMS market accounting for 81% of all SMSs sent . • Off net SMS accounting for 16% of SMSs. Jan – Mar 10

  16. SMS Distribution Jan – Mar 10

  17. Tariffs • Tariff related highlights during the quarter included; • Orange’s Gyekiri becoming a permanent offering, • The review of Orange’s international roaming rates (24th Feb 2010) • The review of Orange’s domestic and international rates (1st March 2010) • The launch of Warid’s Pepeya promotion • The revision of Pakalast Daily rental from 1000/- to 1500 and the 2 hour usage fee of 500/- • UTL on net bonus promotion • MTN’s revised Voice SMS promotion (Feb 2010) • Conclusion of MTN’s goal of Goals promotions Jan – Mar 10

  18. Per Second Profile Comparisons Jan - Mar 10

  19. Payphones • By the end of March, there were 96,980 payphones countrywide. These were in the form of both vendor operated as well as card/coin operated phones. • This translates into a payphone access of at least a payphone for every 100 inhabitants • The drop in rate of growth may be indicative of the fact that the industry is slowly realising universal payphone access. Jan – Mar 10

  20. International Bandwidth • The period 1Q10 has seen an actual realisation of the undersea cable systems at the East African coast. • By the end of March 2010, total international bandwidth had risen to 3,640.94 mbps from 2,020 mbps at the end of Dec 2010 of which; • 1,650 mbps is uplink and • 1,990 mbps was downlink bandwidth • 80% of the available bandwidth is provided by the two cable systems (TEAMS and Seacom). Jan – Mar 10

  21. Mobile Internet Access • Subsequent to new growth in international bandwidth has been a jump in overall internet connectivity. • The mobile broadband segment has again continued with its impressive growth posting 460,000 active accounts at the end of March. • Mobile connectivity has become the dominant internet/ data solution in Uganda, just as it was in the voice market. Jan – Mar 10

  22. Mobile Internet Access • The growth in mobile broadband access and usage is the result of; - Increasing 3G coverage - Dropping bandwidth prices - Dropping handset and modem prices. • By the end of March, the average mobile access price per kb was 1.8/= (the chart on the RHS shows comparative rate comparison of bandwidth pricing) Jan – Mar 10

  23. POST AND COURIER SERVICES Jan – Mar 10

  24. Post and Courier Licensees • The following companies were issued domestic courier licenses; • United Local Courier • M & A Express Ltd • No new Regional or international Courier licenses were issued. • The table on RHS shows the total number of licensed service providers per license category Jan – Mar 10

  25. Post and Courier Access Courier Access Postal Access • Unlike in the preceding quarter, there has been no infrastructure additions in the postal segment. • However there has been an estimated 20 new courier access/ drop points resulting from entry of new providers and expansion of some domestic incumbent providers. Jan – Mar 10

  26. Domestic Postal Traffic Trends • Following the postal season peak of Nov – Dec, there was a 71% drop in domestic letter post during the 1st quarter of 2010. • On the other hand, 30,605 domestic items were handled during the same period translating into a 6% quarter to quarter growth. Jan – Mar 10

  27. Monthly Postal Traffic, 1Q10 Domestic EMS &Letter post Volumes Select Foreign Letter Post Volumes Jan – Mar 10

  28. Broadcasting Jan - Mar 10

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