One way business models and innovations travel is through mergers and acquisitions. We have been waiting to see more African consumers benefit from the low prices and greater connectivity afforded by the Budget Telecom Network Model. Finally it looks like a big Indian telecom operator has got a foothold in Africa, with the transfer of Zain equity in a number of African countries to Bharti Airtel. Zain has fared badly in Africa along with other Middle Eastern operators perhaps because their home turf has been heavily regulated. Most acted as comfortable monopolists until only recently.
Good news for the many outside and inside government who struggled to get this done, including our colleagues from Research ICT Africa. The necessary condition for cheap connectivity is about to the fulfilled. Last week, in the Kenyan port of Mombasa, a regional communications revolution belatedly got under way when Kenya’s president, Mwai Kibaki, plugged in the first of three fibre-optic submarine cables due to make landfall in Kenya in the next few months. They should speed up the connection of Burundi, Rwanda, Tanzania and Uganda, as well as bits of Somalia, Ethiopia and Sudan, to the online world. Of course, as the West African cable showed abundantly, and then the landing of SEA-ME-WE 4 in Cox’s Bazar in Bangladesh did, the cable by itself does not make things better.
The Ugandan government gave full power to the country’s telecoms regulator, the Ugandan Communications Commission (UCC), to liberalize the infrastructure sector in October 2006. Earlier in the year, the Ministry published guidelines defining the opening up of services to full competition. This was a result of the end of the five-year exclusivity period of the National Telecom Operators (NTO)—MTN Uganda and Uganda Telecom, and Cellular Telecom Operator (CTO)—Celtel Uganda. With this new market structure, the Ugandan telecoms is set to become even more attractive as infrastructure rollout increases, new services and applications are deployed, and customers’ needs are meet in the greater context of convergence. In our view, despite current and upcoming challenges, Uganda is well positioned to become a very competitive and vibrant telecoms market and this can already be seen in the moves of South Africa’s giants MTN and Telkom SA which have either increased their stakes in the country or are seeking to make a push into Uganda.