Africell exit will hurt telecom sector, says UCC


The Uganda Communications Commission (UCC) has said the exit of Africell will hurt the country’s telecom sector.

Africell recently announced that it will be exiting the Ugandan market next month after seven years of existence, having taken over from French company, Orange in 2014.

Speaking at the sidelines of the launch of a project between Airtel and  the UN Capital Development Fund at Serena hotel in Kampala on Wednesday afternoon, the acting UCC Executive Director, Irene Kaggwa Sewankambo said whereas Africell didn’t have a big market share in the country’s telecom sector, their exit will have ripple effects.

“Their exit is reducing the options that customers have. As UCC we seek to have choice provided to consumers so that a customer is able to choose a provider and services they wish to have. By Africell coming out of that equation, we have one(service provider) less,” Ssewankambo said.

The acting UCC Executive Director explained that the exit would mean there is going to be disruption on the side of the customers who had subscribed to Africell, noting that it would take them time to get a new service provider.

“If you have been a committed customer and never thought of separating (from Africell), it would be disruptive. “

According to Ssewankambo, whereas the market share for Africell in the mobile market was very small, their exit will have a toll effect on other service providers who were linked to the company.

“Its (Africell) overall disruptive effect is minimized in that respect but we have other providers and players who were providing services to Africell like power companies, mobile money agents  involved with them and distribution shops among others that had exclusive agreements with Africell would be disrupted by the exit since the continuity of those services is not there.”

Sector still alive

Ssewankambo however allayed any fears arising out of the Africell exit, noting that there are so many other players in the country’s telecom sector.

She insisted that the other players are able to ensure the sector is still alive.

“Airtel, MTN, Uganda Telecom are still around as national operators whereas Lycamobile is also in the process of completing to become a fully national operator. The door is still open. We can also have many others coming in.”

Following Africell’s exit from the market, many Ugandans have said the move will see the remaining two big players of Airtel and MTN will take advantage to increase prices, especially for mobile data because of reduced competition.

However, speaking on Wednesday, the UCC Executive Director allayed the fears, insisting that prices are not solely determined by the telecom companies.

“The competition needs to be looked at in regards to a particular market. Looking at it at a broad level would be misleading. Even with Africell in place, their market share was very low. If you talk about rates, there are some other players will competitively lower rates than Africell was offering,”Ssewankambo said.

“Competition is not the only aspect that controls prices. There are other interventions that government has been looking at to ensure prices go down.As a regulator, it gives us more work to empower consumers because we notice they don’t have information. That’s why they think they can go to only a particular operator.”

She explained that there are regional telecom operators that members of the public can use if not satisfied with national telecom operators.

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