Uganda: Mobile Money, Data Boost MTN Uganda Revenues

MTN Uganda, the largest telecom firm in terms of subscriber numbers, recorded an increase in revenues through mobile money and data services, the company announced recently as it released its financials for 2015.

The telecom giant announced last week that mobile money recorded a 23.4 per cent year-on-year increase in revenues while data's revenue increased by 28.3 per cent.

The firm's revenues grew by 2.8 per cent to Shs 1.3 trillion in 2015 from Shs 1.267 trillion in 2014, a slight increase by the telecom firm's standards. Brian Gouldie, the chief executive officer of MTN Uganda, said "mobile financial services remain their flagship product."

The mobile money product has even transcended borders and made it easy for consumers to send and receive money without incurring the high foreign exchange charges. For example, an MTN customer in Rwanda can send money in Rwandese francs to a recipient in Uganda, who will receive it in Uganda shillings.

MTN has had other innovations such as getting companies to pay their staff through mobile money.

Active mobile money subscribers grew by 6.7 per cent to 3.5 million. The firm said mobile money contributed 17.2 per cent of overall revenue. It is six years since MTN introduced its mobile money platform.

On an industry scale, mobile money remains the fastest- growing area with transactions hitting Shs 32.5tn for the year ended December 2015, according to the central bank.

On the data side, more people are communicating through social media platforms such as WhatsApp, Facebook, and Twitter than the traditional voice calls and SMS.

Uganda's young population that continues to embrace technology continues to offer telecom firms such as MTN a lucrative opportunity to grow their revenues in the data segment.

The firm said in a statement that the depreciating shilling presented it its biggest challenge. The shilling depreciated by more than 20 per cent against the dollar during 2015 as the greenback strengthened globally.

The Uganda Communications Commission order that the firms disconnect lines that were unregistered led MTN to see a drop of subscribers by 1.4 million to 8.9 million users.

Also, the regional network of One Area, where the East African states put uniform charges within the region, which cut roaming charges, cut the firm's earnings.

Meanwhile, the firm said it will invest Shs 238bn in 2016. How- ever, this is a drop from the Shs 240bn the firm says it invested in 2015. It said it would continue to invest in the network.

SOURCE:THE OBSERVER