Wednesday, March 14, 2018


In the wake of all the brouhaha about SIM cards my mind raced back 20 years when the mobile phone really took off in Uganda.

It’s true that mobile phones first emerged in Uganda in 1994 with Celtel, but it really became a necessity rather than a luxury in 1998 when South African based MTN set foot in this town.

There are a lot of things that happened then that most would find hard to wrap their minds around.
Can you imagine that airtime used to be billed in dollars? And that there was something called a service charge -- $10, which was charged weekly? If you didn’t renew it your phone would go dead – you couldn’t receive or make calls.

Can you imagine that for the longest time you could only buy airtime from the Celtel office on Wampewo Avenue? And this was only from Monday to Friday excluding public holidays. So if you run out of airtime on Friday evening you were doomed till Monday morning. There was no Me2You. Can you believe the lowest denomination of airtime available was sh10,000?

Even I would find it hard to believe if I had not witnessed it for myself.

That mobile phones are now ubiquitous is thanks to MTN, whose story is an interesting one and one which maps quite well the changes and changed perceptions around mobile phones in this country.

It all started with local businessman Charles Mbire trooping down to MTN offices in South Africa to make a pitch for the company to come to Uganda. At that time MTN was only in South Africa, content to be a small fish in a big pond. Vodacom was and still is the gorilla in that market.

"The MTN strategists referring to donor statistics – The World Bank reports that our per capita GDP in 1997 was $287, didn’t think Uganda was a good mobile phone market...

But Mbire put his money where his mouth was --- all of $2m and offered to partner in the venture. Which made them think if a local businessman was willing to take the risk they needed to take a second look.

They eventually came and bid for the Second Network Operator (SNO) License, which they won. As part of the conditions of the license they were required to have rolled out (we were still thinking in terms of physical lines) 89,000 lines in five years.

Today MTN Uganda reports that it has just under 11 million subscribers but at that time the total number of lines in Uganda stood at 50,000 lines! Or that in 35 years of independence Uganda Posts & Telecommunications (UPTL) as it was called then had managed to roll out about 1,500 lines a year.
So we though they were setting MTN up for failure. How would they roll out in five years what the might UPTL couldn’t do in three decades?

Well on day one in November 1998 MTN opened shop. And their main switch promptly collapsed.
The story goes that the 14,000 line switch installed at Mbuya, which was thought would be more than adequate for at least the first three months, crashed under the weight of the new demand. And this was before noon.

And what was the price of SIM card? Sh70,000!!

Long and short of it, Ugandans snapped up those lines like nsenene on a November evening and the 89,000 target was surpassed before the year was done....

A lot has gone on since then that to sum it up with the cliché “and the rest is history” is to seriously short change the story.

Since that first day we started paying our phone bills in Uganda shillings, the weekly service charge was dropped, the lowest denomination for airtime is now sh500 and we discovered texting.

About the sh500 airtime denomination, I remember then marketing manager Eric Van Veen declaring that they may never go below the sh5000 denomination airtime card – they were made of plastic, about the size of a playing card, because it didn’t make economic sense. 

Since then we moved away from voice where, only but ten years ago in 2007 MTN Uganda was reporting an Average Revenue Per Unit (ARPU) of $10,  which has now fallen to $2.11 in 2016.
The action has moved to data service where MTN now has 1.5 million active data subscribers and 5.2 million mobile money users.

As a journalist reporting for a foreign media agency I used to type or handwrite a story, walk over to the post office to have it faxed. Depending on demand I would have to wait for my story to be faxed after which I would call Nairobi to find out if they had received it. More often than not they transmission would be incomplete and would have to be repeated or just page two and four of a five page fax. And then I would have to stay by the phone at the office in case Nairobi had any questions.

Numbers were hard to come by but that mobile telephony has forever altered the economy of Uganda cannot be disputed. The anecdotal evidence alone is overwhelming.

Today I could send my story of the phone, having already downloaded background off Google and can even transmit and audio and video file, and all in a fraction of the time it took then. Leaving me time to chase other stories. I shudder to think at what my output today would be compared to then. 

This improvement in efficiency and output is mirrored in whatever sector you can think of – manufacturing, transport and general trade. And they say we haven’t even begun to tap the full potential of the mobile phone...

Since that exciting day in November 1998, MTN has paid sh3.7trillion in taxes to the treasury –sh450b alone last year, contributed sh120b to the Rural Communications Development Fund, which is now 2 percent of their gross revenues and It employs thousands directly.

And it has been good business for MTN too, last week they reported revenues of about sh1.6trillion in 2017.

If mobile telephony has become such an integral part of our lives and the general economy, one needs to look to MTN as the trailblazer.

As part of the liberalisation experiment, MTN has to have been the most successful in creating improved efficiencies, increased output and revitalising an industry.

If we can only match the changes that have happened in the last twenty years over the next two decades, I shudder to think how life will have changed by then … no more offices? Ownerless cars? And for the kids? No School?

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