UGANDA TELECOM RACE TIGHTENS

Uganda’s two listed telecom companies turned in strong first-half 2026 results, but beneath the headline growth numbers an increasingly interesting contest is taking shape.

MTN Uganda remains comfortably larger in revenue, customers, profit and dividends. Airtel Uganda, however, grew its underlying operating earnings faster, widened margins and, significantly, generated more data revenue than MTN despite having a smaller overall customer and revenue base.

For the six months to June, MTN reported total revenue of UGX1.888 trillion, 9.7 percent higher than a year earlier, while Airtel’s revenue increased 10.2 percent to UGX1.195 trillion. MTN generated EBITDA of UGX967.5 billion and profit after tax of UGX367.5 billion compared with Airtel’s UGX643.5 billion and UGX224.7 billion respectively.

Financial summary

H1 2026	MTN Uganda	Airtel Uganda
Total revenue	UGX1.888tn	UGX1.195tn
Revenue growth	9.7%	10.2%
EBITDA	UGX967.5bn	UGX643.5bn
EBITDA growth	4.7%	13.4%
EBITDA margin	51.2%	53.9%
Profit after tax	UGX367.5bn	UGX224.7bn
PAT growth	37.7%	13.9%
PAT margin	19.5%	18.8%
Voice revenue	UGX640.4bn	UGX549.5bn
Data revenue	UGX566.8bn	UGX610.6bn
Reported customers	25.4m	19.7m
Capex excluding leases	UGX317.7bn	UGX160.5bn
H1 EPS	UGX16.40	UGX5.60
Annualised H1 EPS	UGX32.80	UGX11.20
Share price, Aug. 26	UGX435.28	UGX171.02
Indicative P/E	13.3x	15.3x
Indicative PEG	0.35	1.10
H1 dividends declared	UGX386.2bn	UGX196bn

MTN reported basic earnings per share of UGX16.40, up from UGX11.90 in H1 2025, while Airtel reported EPS of UGX5.60, against UGX4.90 a year earlier.

For valuation purposes, annualising those half-year earnings gives indicative EPS of UGX32.80 for MTN and UGX11.20 for Airtel. Using their August 26 USE closing prices of UGX435.28 and UGX171.02 respectively gives approximate P/E ratios of 13.3 times for MTN and 15.3 times for Airtel. The share-price data comes from market quotations rather than the companies’ financial statements. (MarketScreener UAE Emirates)

Applying the respective H1 PAT growth rates to those P/E multiples produces indicative PEG ratios of 0.35 for MTN and 1.10 for Airtel. On that simple measure, MTN looks considerably cheaper for the earnings growth being delivered.

But the comparison needs qualification.

MTN’s spectacular 37.7 percent increase in PAT benefited substantially from a 43.1 percent reduction in its tax charge because the comparative period included a once-off transfer-pricing settlement. At the operating level, EBIT increased only 0.2 percent.

That means the 0.35 PEG probably flatters MTN if the current profit growth rate cannot be repeated. Airtel’s 13.9 percent PAT growth was less dramatic but was supported by stronger operating momentum: EBITDA increased 13.4 percent and the EBITDA margin expanded from 52.3 percent to 53.9 percent.

In that sense, MTN looks cheaper on headline valuation, while Airtel’s earnings growth currently looks cleaner.

Airtel wins the data round

Perhaps the biggest surprise in the numbers is data.

Airtel generated UGX610.6 billion in data revenue, up 16.1 percent, compared with MTN’s UGX566.8 billion, up 15.6 percent. Airtel therefore generated about UGX44 billion more from data despite its smaller total revenue base.

Data now represents 51.1 percent of Airtel’s service revenue, up from 48.8 percent a year earlier. Its data customer base grew 18.8 percent to 8.9 million, data usage per customer increased 21 percent and total network data traffic jumped 42.1 percent.

MTN actually reports more active data customers — 12.6 million — but its revenue mix is much broader. Data accounts for about 30.4 percent of service revenue because MTN has another enormous growth engine: fintech.

Fintech revenue increased 10.7 percent to UGX580.6 billion, almost matching data revenue. Active fintech customers increased 11.5 percent to 14.8 million while transaction values surged 26.8 percent to UGX113.3 trillion.

This is arguably MTN’s biggest strategic advantage. Airtel’s Uganda results do not provide a directly comparable mobile-money revenue figure, so the two companies cannot be compared cleanly on fintech from the published numbers.

Margin battle favours Airtel

Another notable divergence is cost efficiency.

MTN’s service revenue rose 9.4 percent but expenses climbed 15.1 percent. EBITDA therefore increased only 4.7 percent and its margin fell from 53.7 percent to 51.2 percent.

Airtel went the other way. Expenses increased only 6.6 percent against revenue growth of 10.2 percent, allowing EBITDA to grow 13.4 percent and margins to expand.

This is why Airtel arguably had the better operating half even though MTN made significantly more money.

Both companies are also spending heavily to protect future growth. MTN invested UGX317.7 billion excluding leases, up 44.6 percent, while Airtel spent UGX160.5 billion, an 82.9 percent increase. MTN raised its 4G population coverage to 93.3 percent and 5G coverage to 25.6 percent.

Airtel rolled out 494 4G sites, 384 5G sites and 1,621 kilometres of fibre and says all its sites are now 4G-enabled. It is also testing direct-to-cell technology with Starlink.

For income investors, MTN remains the heavier cash payer. It declared UGX386.2 billion, equivalent to UGX17.25 per share, in H1 dividends compared with Airtel’s UGX196 billion, or UGX4.90 per share.

So who is ahead?

MTN remains the stronger franchise by scale, absolute profitability, fintech depth and dividend capacity. Airtel currently has the edge in data revenue growth, EBITDA growth and operating-margin momentum.

For investors, the valuation adds another twist. MTN trades at the lower indicative P/E and dramatically lower headline PEG, but part of that advantage comes from a tax-related earnings boost unlikely to recur indefinitely. Airtel is more expensive relative to reported growth, but its improvement is more visibly rooted in operations.

The race is therefore no longer simply about subscriber numbers. Uganda’s next telecom battle will be fought over data consumption, fibre, 5G, home broadband, digital finance and, ultimately, which operator can turn Uganda’s accelerating digital adoption into the highest sustainable return for shareholders.

MTN VS AIRTEL: SCALE VERSUS RETURNS IN UGANDA'S MOBILE MONEY WARS

There was a time when telecom companies in Uganda fought over voice minutes and, later, data bundles. Today, the real battle is being waged in something far more lucrative: the movement of money. And if the latest 2025 numbers are anything to go by, the contest between Airtel Money and MTN MoMo is no longer about who has the biggest network—but who makes the most from the flows that ride on it.

Start with the headline numbers. MTN Mobile Money Uganda grew revenue by a robust 20.2% to Ushs 1.2 trillion, with profit after tax jumping 23.5% to Ushs 308.9 billion . Airtel Money, on the other hand, posted Ushs 334.1 billion in profit, ahead of MTN in absolute terms, but on a smaller revenue base of Ushs 1.02 trillion, growing at a slower 14.4%.

At first glance, MTN looks like the runaway winner. But look a little closer, and a more interesting story begins to emerge.

MTN is clearly winning the scale game. Its ecosystem now boasts 14.7 million subscribers, 241,000 agents and 115,000 merchants, with transaction values hitting a staggering Ushs 195.5 trillion . These are not just big numbers—they are the building blocks of a platform. The more users, agents and merchants you have, the harder it becomes for anyone else to dislodge you. In fintech, scale is not just an advantage; it is a moat.

But scale, as any seasoned investor will tell you, does not always translate into superior returns—at least not immediately.

That is where Airtel Money’s numbers begin to turn heads. Generating higher profits than MTN on lower revenue suggests a business that is squeezing more out of every shilling that passes through its system. In other words, Airtel may not yet match MTN in breadth, but it is arguably ahead on efficiency.

Part of the explanation lies in strategy. MTN is playing the long game. Its own disclosures show that advanced services now contribute over 30% of revenue, driven by lending, savings and payment innovations . It is investing heavily to turn MoMo from a payments pipe into a full-service financial supermarket.

Airtel, by contrast, appears more disciplined—less flashy, perhaps, but highly focused on the core business of transactions and fee extraction. That discipline shows up in the bottom line.

The balance sheet tells a similar story. MTN’s total assets surged 30% to Ushs 1.87 trillion , compared to Airtel’s 13.1% growth to Ushs 1.16 trillion. MTN is building muscle; Airtel is building margins.

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Summary Comparison

Metric	Airtel Money (2025)	MTN MoMo (2025)
Revenue	Ushs 1.02 tn	Ushs 1.2 tn
Revenue Growth	+14.4%	+20.2%
Profit After Tax	Ushs 334.1 bn	Ushs 308.9 bn
Profit Growth	+7.4%	+23.5%
Total Assets	Ushs 1.16 tn	Ushs 1.87 tn
Asset Growth	+13.1%	+30.0%
Subscribers	Not disclosed	14.7m (+6.5%)
Agents	Not disclosed	241k (+13.5%)
Merchants	Not disclosed	115k (+33.6%)
Transaction Value	Not disclosed	Ushs 195.5 tn (+23.3%)

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In the end, this is shaping up to be a classic market contest. MTN is building the rails of Uganda’s digital financial system—wide, deep and increasingly indispensable. Airtel is running a leaner operation, extracting more profit per transaction.

If history is any guide, both strategies can win. But rarely do they win equally. The real question is whether, over time, scale will swallow efficiency—or efficiency will force scale to behave.

AIRTEL MOBILE MONEY PROFIT UP 7.4 PCT

The company reported a 7.4% increase in profit after tax to Ushs 334.1 billion for the year ended 2025, up from Ushs 311.0 billion in 2024, underpinned by strong growth in mobile money transactions and sustained operating efficiency.

Total income grew by 14.4% to Ushs 1.02 trillion, compared to Ushs 893.0 billion the previous year, reflecting increased uptake of digital financial services and higher transaction volumes across its platform. The performance reinforces the company’s positioning as a key player in Uganda’s fast-expanding fintech ecosystem.

Operating profit rose by 7.4% to Ushs 477.3 billion from Ushs 444.3 billion, supported by scale efficiencies, although cost pressures were evident. Total expenditure increased by 21.0% to Ushs 549.2 billion, largely driven by higher sales and marketing spend, which climbed to Ushs 459.0 billion as the company invested in customer acquisition and retention.

Despite the rise in costs, margins remained strong, highlighting the resilience of the company’s platform model.

On the balance sheet, total assets expanded by 13.1% to Ushs 1.16 trillion, driven primarily by growth in mobile money trust balances, which rose 14.0% to Ushs 969.5 billion. Equity remained largely flat at Ushs 114.4 billion, underscoring the firm’s asset-light structure, where customer balances fund a significant portion of operations.

Analysts note that the results demonstrate the scalability of digital financial services, with revenue growth continuing to outpace profit expansion, suggesting a period of strategic reinvestment.

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Summary of Key Results

Metric	2025 (Ushs bn)	2024 (Ushs bn)	% Change
Total Income	1,021.2	893.0	+14.4%
Operating Profit	477.3	444.3	+7.4%
Profit After Tax	334.1	311.0	+7.4%
Total Expenditure	549.2	454.0	+21.0%
Total Assets	1,155.8	1,022.0	+13.1%
Mobile Money Balances	969.5	850.4	+14.0%
Equity	114.4	113.4	+0.9%

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The results point to a business leveraging scale in digital payments to drive growth, even as rising costs signal an increasingly competitive push for market share.

WE ARE TAXING THE PHONE THAT COULD SAVE UGANDA'S ECONOMY

Nakato sells second-hand clothes in Owino. No bank account. No paperwork trail. No loan officer who would look at her twice. But two years ago, she bought a refurbished Tecno smartphone on instalments. Today, she receives payments on Airtel Money, orders stock from Kikuubo via WhatsApp, and sends school fees to Masaka without leaving her stall. She has never stepped into a bank. She does not need to. The phone is her bank, her market, and her accountant.

And every time she uses it, the government taxes her.

That is where the story begins — and where the policy contradiction becomes impossible to ignore.

Because while Nakato pays a one percent excise duty on every mobile money transaction, her wealthier counterpart moving money through a bank account pays nothing. Same economic activity. Different tax treatment — depending on whether you are inside or outside the formal financial system.

Is it me, or are we taxing inclusion?

Start with the scale of what is at stake.

MTN Uganda’s revenues crossed sh3.6 trillion last year. Airtel’s  

revenues crossed the sh2trillion mark last year. The value of transactions flowing through mobile money platforms two years ago exceeded Uganda’s entire GDP of roughly sh200 trillion. In effect, the sector’s digital rails are now carrying an economy’s worth of value.

And yet we tax the very infrastructure that makes this possible.

Global evidence is unequivocal. A 10 percent increase in mobile or broadband penetration drives between 0.5 and 1.5 percent additional GDP growth. In Sub-Saharan Africa, where mobile is often the first and only access point to the digital economy, the impact tends to be even higher. For Uganda — still largely informal, still under-connected — this is not marginal. It is transformative.

Which makes our policy posture all the more puzzling.

We treat the phone as a luxury good rather than as economic infrastructure.

A smartphone today is not a lifestyle device. It is the entry point to the economy itself. It is a payments platform, a business directory, a logistics tool, a credit history, and a marketplace — all in one. For a trader in Owino or a boda rider in Gulu, it is the most productive asset they own.

Yet we tax it at the border.

Import duties on smartphones raise the cost of entry into the digital economy before a user even switches the device on. Rwanda and Tanzania have taken a different view — lowering device costs deliberately to accelerate adoption, expand mobile money usage, and ultimately widen the tax base through higher economic activity.

The trade-off is straightforward. The revenue collected at the border is small. The growth foregone by keeping devices expensive is not.

Then comes the second layer of taxation — the one that bites daily.

Mobile money transactions attract excise duty. Bank transfers do not.

It is, in effect, a tax on the informal sector’s pathway into formality. The very citizens that mobile money has brought into the financial system — those excluded for decades by traditional banking — are now the ones paying a premium to transact.

And yet mobile money has arguably done more for financial inclusion than any policy intervention in the last 20 years.

From Owino to Gulu to Mbarara, millions now participate in a traceable financial ecosystem. Payments leave records. Records create data. Data enables visibility. And visibility is the foundation of taxation.

URA cannot tax what it cannot see.

Mobile money makes the invisible visible.

This is how informal economies formalise — not through enforcement, but through convenience. When transactions move onto digital rails, the tax base expands organically. Every payment, every transfer, every transaction is a step toward a broader, more measurable economy.

Which is why taxing those transactions is counterproductive.

Lower transaction costs would increase volumes. Higher volumes would expand the pool of traceable economic activity. Over time, government would collect more — not less — revenue, but from a wider base rather than higher rates.

And yet, in a moment of policy irony, the conversation has begun to drift in the opposite direction — proposals to introduce excise duty on bank transactions to “level the playing field.”

Level it downwards.

Tax everyone equally.

It is a seductive argument — and a deeply flawed one.

Because the problem is not that bank transactions are undertaxed. The problem is that mobile money is overtaxed. Expanding a distortion does not correct it. It simply spreads the inefficiency across the entire financial system.

If anything, the logic points the other way.

The rational policy is not to tax banks like mobile money. It is to stop taxing financial transactions altogether.

Remove the friction. Let money move.

Because every transaction cost is a tax on economic activity itself — a brake on commerce, a penalty on inclusion, a disincentive to formalisation. In an economy trying to broaden its tax base, that is the last thing you want.

Kenya’s experience with M-Pesa offers a clear preview. Affordable mobile money enabled households to save, invest, and grow small businesses — lifting many out of poverty. Uganda is on the same path, but with one hand tied behind its back.

The cost of this policy choice is not abstract.

Uganda’s tax-to-GDP ratio remains low, not because rates are insufficient, but because the tax net is narrow. Most economic activity still sits outside the formal system. Every barrier to digital adoption — expensive devices, taxed transactions — slows the migration of that activity into the visible economy.

And every delay is a missed opportunity for growth.

The solution is not complicated.

It is, in fact, disarmingly simple.

First, reduce or eliminate import duty on smartphones. Treat them as productive assets, not consumption goods.

Second, eliminate excise duty on all financial transactions — mobile money and bank transfers alike.

These are not concessions to telecom companies or banks. They are investments in SMEs, in financial inclusion, and in the long-term expansion of the tax base.

Because the phone is not the problem.

The phone is the economy.

And until policy catches up with that reality, we will continue to tax the very tool that could accelerate Uganda’s growth.

TELECOM TITANS MTNU AND AIRTEL 2025 RESULTS COMPARISON

For most of the past two decades, Uganda’s telecom story has been framed as a rivalry between two companies: MTN Uganda and Airtel Uganda.

But the 2025 results released by the two operators reveal something much bigger than competition. They show how telecoms have quietly become one of the most powerful engines of Uganda’s modern economy — generating trillions in revenues, handling hundreds of trillions in digital payments, and increasingly acting as the financial plumbing of everyday commerce.

The numbers are staggering.

MTN Uganda reported revenue of Sh3.6 trillion, up 13.6%, with profit after tax of Sh678.8 billion.

Airtel Uganda, whose financials are reported in dollars, delivered profit before tax of roughly Sh2.3 trillion and profit after tax of about Sh1.6 trillion, when converted at Sh3,600 to the dollar.

Two companies. Multi-trillion-shilling businesses. And an industry that has evolved from selling voice minutes to powering the digital economy.

MTN: The Scale Champion

MTN remains Uganda’s telecom heavyweight.

With Sh3.6 trillion in revenue, the company sits among the largest corporate revenue generators in the country.

Its network scale is formidable:

• 24.2 million subscribers

• 12 million active data users

• 14.7 million fintech users

That scale translates into industry-leading profitability.

MTN’s EBITDA margin of 53.8% reflects a business that has reached operational maturity. Telecom economics at this stage resemble utilities: heavy upfront investment followed by long periods of strong, predictable cash flow.

In 2025 alone, the company invested about Sh843 billion expanding network capacity and improving service quality.

Airtel: The Profit Story

If MTN dominates scale, Airtel’s 2025 results tell a story of profit acceleration.

Converted into shillings, Airtel generated roughly:

• Sh2.3 trillion profit before tax

• Sh1.6 trillion profit after tax

That sharp jump in profitability suggests improved operational efficiency and a telecom market entering its cash-generation phase.

In the early years of Uganda’s telecom sector the focus was subscriber growth — building towers, expanding coverage and acquiring customers.

Now the industry has entered its second phase: monetisation.

The Real Engine: Fintech

Yet the most important similarity between the two companies lies in mobile money.

At MTN:

• Fintech revenue reached Sh1.1 trillion

• Transaction volumes hit 5 billion

• Transaction value reached Sh195.5 trillion

Those numbers illustrate how telecom networks have evolved into financial infrastructure.

Mobile money is now the nervous system of Uganda’s economy.

Salaries move through it. Bills are paid through it. Small traders rely on it for daily commerce.

Telecom companies are no longer simply communication networks.

They are digital financial ecosystems.

Data Is the New Voice

Another structural shift visible in the results is the rise of data.

MTN’s data revenue jumped 28.8% to Sh1 trillion, while voice grew just 1%.

The smartphone has replaced the voice call as the primary interface with telecom networks.

Consumers now rely on telecom infrastructure to stream video, transact online, run businesses and access government services.

In effect, telecom operators are evolving into digital platform companies.

A Quiet But Important Change for Investors

One of the most interesting announcements buried in the MTN results is a change in dividend policy.

Previously, MTN Uganda paid dividends three times a year — after the full-year, half-year and third-quarter results.

The company will now pay dividends quarterly.

That may sound like a minor administrative tweak, but for investors it is actually quite significant.

Quarterly dividends mean:

• more predictable cash flow

• shorter waiting periods for income

• stronger appeal for institutional investors

In effect, MTN is positioning itself more clearly as a high-yield telecom infrastructure stock.

What This Means for Investors

For investors on the Uganda Securities Exchange, the telecom sector remains one of the most compelling opportunities on the market.

At current closing prices — Sh472 for MTN Uganda and Sh112 for Airtel Uganda — the valuation picture becomes even more interesting.

Telecom Investment Comparison

Company	Price (UGX)	EPS (UGX)	P/E	PEG		Div Yield	ROIC	Rank (PEG)
MTN Uganda	472	30	15.7	0.69		6.1%	32%	2
Airtel Uganda	112	40	2.8	0.14		7.0%	28%	1

The PEG ratio — price relative to growth — is often one of the most revealing valuation metrics.

A PEG below 1 typically suggests undervaluation relative to growth potential.

By that measure, Airtel Uganda ranks first, suggesting that the market may be significantly underpricing its growth prospects.

MTN Uganda ranks second but remains the higher-quality dividend stock, reflecting its market leadership and stronger fintech ecosystem.

Investment Strategy

For long-term investors, the telecom sector offers two complementary opportunities.

MTN Uganda – Dividend Stability

MTN paid Sh28.75 per share in dividends in 2025, distributing about Sh643.7 billion to shareholders.

With a payout ratio above 75%, the company behaves like a high-yield telecom utility.

The shift to quarterly dividends further strengthens its appeal to investors seeking steady income.

Airtel Uganda – Value and Growth

Airtel’s extremely low valuation relative to earnings growth makes it one of the most interesting value opportunities on the exchange.

If its profit trajectory continues, the current price may eventually look like a bargain.

The Bigger Story

The rivalry between MTN and Airtel may dominate headlines, but the deeper story is structural.

Telecom networks have become the digital backbone of Uganda’s economy.

They connect businesses, enable payments, and power digital commerce.

And as the country continues to digitise, telecom companies will likely remain among the most powerful wealth-creation vehicles on the Uganda Securities Exchange.

For investors, the lesson is simple.

Owning a slice of the network may prove one of the smartest investments of the coming decade.

AIRTEL UGANDA CROSSES SH2TRILLION

There is something psychologically powerful about crossing a trillion-shilling mark. It signals scale. It signals system relevance. It signals that you are no longer just a company — you are infrastructure.

Last week, Airtel Uganda reported revenues of Sh2.25 trillion for the year ended December 2025 — the first time it has decisively crossed the Sh2 trillion threshold . That is not just growth. It is altitude.

Top-line revenues grew 13.3%. But the more telling number is further down the income statement: Profit After Tax jumped 41% to Sh446.9 billion, up from Sh316.7 billion the previous year

. Earnings per share climbed to Sh11.2 from Sh7.9 .

In plain language: Airtel is converting growth into real money.

For years, the telecom story in Uganda was framed as a subscriber war — SIM card growth, promotions, price competition. Margins were thin, spectrum costs heavy, capital expenditure relentless. Yet what these results suggest is something deeper: the business model has matured.

Data is no longer an emerging revenue stream — it is the core engine. Data and value-added services delivered Sh1.176 trillion, up from Sh961 billion . Voice revenue, often prematurely declared dead, held firm at over Sh1 trillion . Meanwhile, the total customer base expanded by 19.2% .

But the most impressive development is operating leverage.

Operating profit rose 35% to Sh849 billion, with margins at 37.7% . When profits grow faster than revenues, it signals pricing discipline, cost management, and asset efficiency. Airtel added 258 network sites during the year , but incremental revenue is now falling more efficiently to the bottom line.

Cash generation tells the same story. Net operating cash flow crossed Sh1 trillion . That is not just accounting profit — it is liquidity muscle. Even after paying out Sh404 billion in dividends , leverage remains manageable at 1.5x EBITDA .

When Airtel listed, sceptics questioned whether Uganda could sustain two large telecom operators with heavy spectrum obligations and expanding infrastructure costs. The fear was structural margin compression. Instead, scale is now working in favour of the operator. Customer growth is translating into monetisation, not just traffic.

Crossing Sh2 trillion in revenues does not just place Airtel in an elite corporate bracket — it confirms telecom’s transformation from growth gamble to cash-generating utility. The pattern is clear: expanding digital usage, improving margins, rising dividends.

For investors, this is no longer a speculative telecom play. It is a core portfolio counter anchored on scale, profitability and cash.

In Uganda’s evolving corporate landscape, that combination is rare.

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Airtel Uganda – Key Financial Results

Metric	2025	2024	% Change
Revenue (Shs bn)	2,249.7	1,986.5	+13.3%
Operating Profit (Shs bn)	849.2	629.1	+35%
Profit Before Tax (Shs bn)	639.9	451.7	+42%
Profit After Tax (Shs bn)	446.9	316.7	+41%
EPS (Shs)	11.2	7.9	+42%
Net Operating Cash Flow (Shs bn)	1,013.4	880.0	+15%
Dividends Paid (Shs bn)	404.0	301.0	+34%

THE USE'S QUIET BULL: WHERE THE SMART MONEY IS MOVING

The Uganda Securities Exchange is beginning to hum again. August 2025 did not set any records for turnover — in fact, trading volumes eased to sh7.7 billion from July’s  sh10.8 billion. But look closer and you’ll see something more important: both the All Share Index and the Listed Companies Index climbed, 5.6 perspetcive and 6.6 perspective respectively. In other words, prices are rising even as activity slows. That’s not speculation. That’s conviction.

I remember an old hand at the exchange once telling me: “Paul, the USE does not reward noise; it rewards patience.” True to form, the market is now rewarding those who stuck with banks, telecoms, and even a few brave souls who bet on pharmaceuticals. This is not just my reading of the market, but also drawn from the SBG Securities Market Performance Report, August 2025, which has tracked the shifts in liquidity, index movement, and company-specific developments.

Banks: The Bedrock of the USE

Stanbic (SBU) has become the exchange’s workhorse. Up nearly 11 percent in August and 44 percent this year, it’s backed by profit growth of 18 percent and a return on equity north of 26 percent. At a PEG of 0.33 and a dividend yield approaching eight percent, it is almost the definition of growth at a reasonable price.

Bank of Baroda (BOBU), for years the neglected cousin, has come roaring back. Its PEG of 0.04 is absurdly cheap — a sign that the market has still not fully priced in its recovery. Throw in a dividend yield of 6–7 percent and you have an old-school income stock suddenly dressed up as a growth play. DFCU, though still carrying governance baggage, offers a PEG of 0.18 and a dividend that makes it hard to ignore for those who like contrarian bets.

Telecoms: Growth with Cash in Hand

If banks are the USE’s bedrock, the telecoms are its growth engine. Airtel Uganda and MTN Uganda both grew profits at close to 30%, and they reward you with dividends of 5–7 percent. Their PEGs hover around 0.35, telling us their prices are still not running ahead of their growth. Investors holding these two are not just betting on Uganda’s future digital economy — they’re already being paid to wait.

QCIL: The Dark Horse

Quality Chemicals (QCIL) is the quiet revolution. Profits are up more than 80 percent this year, giving it a PEG of 0.13. That’s ridiculously cheap for a company proving it can scale. Dividends are modest for now, but for the patient investor, this is the counter where growth today becomes cash tomorrow.

 

The Stragglers

Umeme’s numbers are what happens when story runs ahead of fundamentals: a P/E of nearly 59, negative profit growth, and no dividend comfort. Uganda Clays and New Vision remain in survival mode — they look cheap but are actually expensive when you measure in opportunity cost.

PEG + Dividend Yield Ranking

Counter	P/E	Profit Growth	PEG	Dividend Yield	Verdict
BOBU	4.70	110%	0.04	~6–7%	Deep Value + Income
QCIL	10.42	82%	0.13	~2–3%	Exceptional Growth Value
DFCU	2.68	15%	0.18	~4–5%	Undervalued
SBU	6.05	18%	0.33	~7–8%	Growth + Income Star
AirtelU	10.10	29%	0.35	~5–6%	Growth + Dividends
MTNU	9.81	28%	0.35	~6–7%	Growth + Dividends
Umeme	58.76	-3.6%	n/a	<2%	Overvalued
UCL	-8.53	Negative	n/a	0%	Loss-Making
NVL	0.20	Negative	n/a	0%	Value Trap

So, How Would One Allocate a Portfolio?

If I had UGX 100 shillings to put to work today on the USE, guided by PEGs and dividends, here’s how I’d spread it:

• Banks (SBU, BOBU, DFCU) – 40 shillings
  The safest balance of income and growth. Stanbic as the anchor, Baroda for value, and a smaller tilt to DFCU for contrarians.
• Telecoms (Airtel, MTN) – 30 shillings
  Both are growth-plus-dividend engines. Split evenly.
• QCIL – 20 shillings
  The growth bet of the next 3–5 years. Modest dividend now, but strong upside.
• Speculative/Opportunistic – 10 shillings
  This is where you tuck away a small stake in laggards (UCL, NVL) if you believe in turnarounds, or simply hold cash for better entry points.

Final Word

The USE in 2025 is no longer a market of sleepy counters. It is quietly rewarding those who study not just prices but growth, dividends, and valuations in tandem. PEG ratios show us clearly where value still lies — in banks, telecoms, and QCIL. The rest, for now, are lessons in patience or caution.

DISCLAIMER: The author owns shares on the USE. Analysis based on the SBG Securities Market Performance Report – August 2025, Crested Towers, Kampala.

AIRTEL VS MTN: EFFICIENCY, GROWTH AND RETURNS IN H1 2025

When Uganda’s two telecom giants released their half-year numbers to June 2025, the story was not just about profits and dividends, but about how differently each is growing – and what that says about their business models.

Topline Growth

MTN posted 13.3% revenue growth to UGX 1.7 trillion, fuelled by a 31.3% surge in data and 18.6% growth in fintech revenues. Airtel actually outpaced MTN in percentage terms, with 17.9% growth in overall revenue to UGX 1.48 trillion【image】. However, MTN’s bigger base and diversification make its growth more sustainable.

Efficiency in Execution

The efficiency gap shows up in the EBITDA line. MTN expanded its margin to 53.7%, compared to Airtel’s 39.7%. That’s a clear sign of stronger cost discipline and better network economics for MTN. Airtel is still delivering, with UGX 590 billion in EBITDA, but its business runs heavier.

Bottom Line Strength

Airtel’s profit after tax came in at UGX 197.4 billion, while MTN reported UGX 267.0 billion. Once you adjust for MTN’s one-off tax settlement, profits rise to UGX 377.9 billion, making Airtel look modest by comparison.

Returns on Equity (ROE)

Airtel’s lean balance sheet magnifies its profits, giving it an extraordinary ROE of 117%, compared to MTN’s 42% (which itself is still robust). Investors should note, though, that Airtel’s high return comes with higher leverage and thinner equity buffers.

Returns on Invested Capital (ROIC)

Airtel also edges MTN on ROIC, at 26% versus 20%. Again, this is more structural than operational. Airtel’s smaller balance sheet makes its capital sweat harder. MTN’s heavier investments in fibre, towers, and spectrum weigh on ROIC now, but they underpin future dominance.

Comparative Table – H1 2025

Metric (H1 2025)	Airtel Uganda	MTN Uganda
Revenue (UGX)	1.48 trillion	1.72 trillion
Revenue Growth	+17.9%	+13.3%
EBITDA (UGX)	589.6 billion	924.2 billion
EBITDA Margin	39.7%	53.7%
PAT (UGX)	197.4 billion	267.0 billion (377.9b adj.)
PAT Margin	13.3%	15.5% (21.9% adj.)
ROE	117%	42%
ROIC	26%	20%

The Investor’s Lens

If you’re looking for efficiency and scale, MTN is ahead: stronger EBITDA margins, more diversified growth engines, and a larger profit base. But if you want spectacular returns on capital, Airtel dazzles with triple-digit ROE and higher ROIC, though on a thinner, riskier base.

In the end, the numbers tell two stories: MTN is the heavyweight building steady muscle, while Airtel is the nimble sprinter – lean, fast, and highly geared.