1. Getting unwired in East Africa Michael Minges, ITU minges@itu.int The views expressed are those of the author and may not necessarily reflect the opinions of the ITU or its Members. PARTNERSHIPS & RURAL TELECOMMUNICATIONS DEVELOPMENT Kampala, Uganda 3-5 November 1999

2. Partnerships & Rural Telecoms, Kampala, November 99 Mobile cellular in East Africa Kenya Tanzania Uganda Start-up: 6/95 Subscribers: 26000 Penetration:0.15% Start-up: 9/94 Subscribers: 38000 Penetration:0.12% Start-up: 1992 Subscribers: 7300 Penetration:0.02% Data at December 1998.

3. Partnerships & Rural Telecoms, Kampala, November 99 Source: ITU. Mobile growth 50x 6x

4. Partnerships & Rural Telecoms, Kampala, November 99 Source:ITU. Substitution 4 Quick to implement 4 Low connection fee 4 Generally little wait for service 4 Functionality advantages

5. Partnerships & Rural Telecoms, Kampala, November 99 Strategic foreign investors MobileForeign CountryOperatorInvestorShare TanzaniaMICMillicom (Luxembourg)57% TriTelTRI (Malaysia)60% UgandaCelTelVodafone (UK)37% MTNMTN (South Africa)50% Telia (Sweden)30% Source: ITU.

6. Partnerships & Rural Telecoms, Kampala, November 99 Source: MIC Tanzania. Prepaid 4 Provides access to those who might not normally qualify 4 Accounts for majority of new subscriptions 4 Operator avoids bad debt

7. Partnerships & Rural Telecoms, Kampala, November 99 Roaming 4 Extra revenue source 4 Can help spur regional integration 4 Not widely implemented Roaming agreements Tanzania (Tritel): 4 Uganda (MTN): 5 Kenya: 0 Note: No Tanzania-Uganda- Kenya roaming!!!

8. Partnerships & Rural Telecoms, Kampala, November 99 Mobile cellular licenses 4 How many –How many operators can market bear? 4 How long –Time period of license 4 How much –License fees will be passed on to consumers 4 How about –Coverage obligations –Technology –Scope

9. 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. Number of mobile operators with license or to be licensed Kenya Tanzania Uganda Number of mobile operators in operation

10. Partnerships & Rural Telecoms, Kampala, November 99 Universal access obligations: Coverage 4 Coverage typically limited to major towns 4 Licenses should be linked to coverage targets 4 Global mobile satellites may help Source: ITU adapted from GSM Association. MTN Uganda: Mobile cellular coverage

11. Partnerships & Rural Telecoms, Kampala, November 99 Tariffs 4 Still high relative to fixed and compared to other regions 4 Biggest barrier to mobile 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.

12. Partnerships & Rural Telecoms, Kampala, November 99 Competition in Uganda Source: ITU adapted from company information.

13. Partnerships & Rural Telecoms, Kampala, November 99 Handsets 4 Factors affecting handset prices: –Custom duties –Distribution policy –Subsidies

14. Partnerships & Rural Telecoms, Kampala, November 99 Forecast Source: ITU. Fixed and mobile telephone subscribers (000s) KenyaTanzaniaUganda

15. Partnerships & Rural Telecoms, Kampala, November 99 Conclusions 4 Mobile cellular enhances access to communications 4 Must not be viewed as service for privileged 4 Requires regulatory encouragement to extend access to all ©ITU / A. de Ferron

16. Partnerships & Rural Telecoms, Kampala, November 99 World Telecommunication Development Report 1999 Theme: Mobile cellular Publication launch: TELECOM 99 Available on paper and PDF Website: www.itu.int/ti/publications/ wtdr_99/wtdr99.htm