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 thought they were setting MTN up for failure. How would
they roll out in five years what the mighty 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 over the phone, having already
downloaded background off Google and can even transmit 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?
