July 7, 2024

Uganda Telcos’ 5G dilemma

Telecom mast

By Paul Murungi
 
A witty business coach once punned that if you gave a Ugandan charcoal seller enough money to start a new business line, say buying and selling electric cars, he most likely would not think about changing to auto-biz. Rather he would think in terms of how many more bags of charcoal they can add to their stock, with the new money.

A slight joke. There are several little lessons from this jest. The transition from one familiar, comfortable business territory to a new, unfamiliar one is always hard. Secondly, thinking out of the box and adapting to new technologies is slower than the introduction of the technologies themselves. Third, that introduction of a technology is not the same as its adoption, uptake, and utilisation- the latter requires investment in infrastructure, education skills and human resources.

That situation seems to recapitulate what Ugandan telecoms are finding themselves in with the much-anticipated 5G. While they have in place the new technology (or at least the for it capacity), the Ugandan market seems to be still largely ambling behind (in analogue mode even) and as such the uptake and utilisation of the new 5G is slow.

The Infrastructure Magazine understands that telecoms are therefore torn between putting in the dollar to invest in expanding the infrastructure for the technology (as they wait for the market to catch up) or wait for the market transition to happen before they can invest in expanding the technology.

In early 2020, Uganda became the third country in Africa to trial 5G – closely following the continent’s economic giants- South Africa and Nigeria. Three years later, in 2023, Uganda again played top league, becoming one of the top four African countries that launched the technology – effectively making the big leap into the Fourth Industrial Revolution (4IR). However, telcos are now having a headache figuring out how to monetise the new technology due to its current low uptake arising from various   economic and infrastructure challenges
 
5G, (short for fifth generation cellular technology), is the latest and most advanced iteration of internet technology. It represents a significant advancement over its predecessors – 2G, 3G and 4G, and is designed to provide faster, more reliable and lower latency wireless communication.
 
The new technology is considered to be the fastest network that can provide download speeds of up to 10 Giga bytes per second, or even higher in ideal conditions, which is considerably faster than 4G’s maximum of 100 Megabytes per second.
 
This means smartphone users can download files in a much shorter time, stream videos and browse the internet with a seamless experience.

Besides these uses that the earlier internet technologies can also perform- albeit at limited speeds, the 5G technology is especially lauded for its groundbreaking abilities that enable digital transformation, automation and robotics, internet of things, artificial intelligence and machine learning, biotechnology and bioinformatics as well as block chain technologies.

Enabling these 4IR functions requires reconceptualization of use of internet and to some extent changes in infrastructure and devices.

Two years ago, global consulting firm, PwC in its Strategy& stated that “5G creates the potential for entirely new service offerings, use cases, business models, and revenue opportunities. Instead of relying mainly on end-users paying telecom companies directly for connectivity, operators in a 5G world could generate substantial revenues by charging the companies that are providing 5G-reliant services to their customers.”

This means that the market and its operations need to remodel for the 5G technology – manufacturers, health service providers, homeowners, office operations, among others,  all have to change in order to absorb the new technology. Unfortunately, this transition has not yet happened in most of Uganda’s industry, institutions, homes, offices, and even mindsets.
 
Both MTN and Airte l- the two largest telecom service providers in Uganda have indicated that the 5G technology capacity they have, has the potential for use in a modern economy and can revolutionise various industries such as manufacturing, health care, transportation, manufacturing, entertainment. With this technology, it will be possible to perform applications in remote surgeries, smart transportation systems, augmented reality gaming and running smart homes.

The Monetisation challenge
 
Karim Ddamulira, a tech savvy Ugandan, resident in Kampala, told The Infrastructure Magazine he has used 5G technology but has since dropped it because, he said, it is a data guzzler. He has since switched back to the 4G where he finds comfort. Ddamulira, says telecoms need to incentivize and interest users on the technology.
 
“Now the fact that I’m an end user, I expect my service provider to work on it. So I expect MTN to give me a service which is secure and user friendly,” he said.
 
“I also expect phone manufacturers to develop phones which are easily compatible with any new improvement or modification services used or any technology that is coming up.”

Although the impact of the use of 5G will be felt more in the country through industrial and institutional uses rather than individuals,  Ddamulira’s  experience tells the challenge telcos have on their hands with the new technology.

The expansion of 5G technology is currently dogged by social, economic and infrastructure challenges that the industry (and the government) need to overcome if the transition to the new technology must come sooner and faster, and if its benefits are to sip down the national fabric.

Rebecca Mukite, the Uganda Communications Commission Public and International Relations Manager told The Infrastructure Magazine that monetisation of 5G technology remains a challenge noting that whereas there are a number of 5G sites in town (Kampala area); the use cases for 5G that would incentivise the capital investment are still on the lower side.
 
“5G uses high frequency that can ably support the big bandwidth, the challenge is that these have much less distance ranges and as such need denser network infrastructure and more investment,” she said. “We still have a big population that lies in between 2G and 5G- so the telecoms have to support an elastic market.”
 
David Birungi, Airtel’s Public Relations Manager told this Magazine that the telecom has so far maintained only 50 sites on the market largely serving business enterprises where they see quick uptake and a high revenue per user return.
 
Unexpectedly, telecoms have focused on a more business-to-business strategy deploying 5G in more urban and business locations, with less focus on remote locations.
 
5G monetisation remains on top of mind for most telecom operators. A recent GSMA report shows that 5G use cases, helped by an ever-growing portfolio of 5G-enabled smartphones across various price points could enhance monetisation.
 
As 5G users are more likely than 4G users to add content and services to their subscription plans, this is something for operators to build on as they design their 5G commercial strategies and offerings.

While video and music streaming remain the most desired bundling options in most markets, there are also opportunities to monetise digital gaming, as cloud-based services require high-speed connectivity and low latencies.
 
Consumers will demand the best possible network experience, thereby providing operators with an opportunity to use online gaming to showcase their 5G investments. A good example that is being used by other operators, is Kenya’s Safaricom has set up three 5G experience centres, in partnership with Huawei, that contain Virtual Reality gaming zones.
 
5G also brings new opportunities in the enterprise segment. MTN and Huawei have implemented numerous 5G Business to Business commercial applications, spanning various industries, such as their partnership with Minetec Smart Mining to establish South Africa’s first 5G-connected coal mine.
 
To develop further applications that leverage 5G’s unique capabilities, operators and equipment vendors in Africa, such as Orange and Qualcomm, have invested in programmes dedicated to co-creating consumer and enterprise solutions.


Current sites
 
On 7th August 2023, Airtel officially launched the 5G network with 50 sites going live in and around the Kampala City area. Airtel’s deployment focused on specific areas, such as densely populated residential zones, shopping centres, healthcare facilities in the central business district.
 
MTN Uganda on its part signed a Memorandum of Understanding (MOU) with Hima Cement to start preparations towards the launch of 5G in the Hima cement factory for its operations. The partnership marked the first- ever consideration by a telecommunications company to deploy 5G for industrial operations.
 
To promote its 5G service, MTN partnered with Huawei to launch 5G experience centres in Lugogo Area and UCC headquarters in Bugolobi and surrounding areas in Kampala to give consumers the opportunity to trial the latest network generation technology. The experience featured Virtual Reality gaming zones, showcases of smart capabilities for homes and enterprises, and speed testing booths. 

Latest developments

MTN seems to have dropped the gauntlet and gone for trial investment.

Yasin Ramadhan, the MTN Uganda Acting Chief Technology Information Officer, in an update about 5G developments says the telecom’s rollout strategy is progressing well ahead of schedule.

“We’ve surpassed our initial target by activating over 294 new 5G sites this year, bringing the total to 331 and are still rolling out more. This rapid expansion positions us to achieve a projected 15 per cent population coverage by year-end,” he told us in May.

This expansion goes beyond Kampala, encompassing major cities like Gulu, Mbarara, Mbale and more.

Ramadhan said consumer uptake is encouraging with businesses recognising the immense potential of 5G with particular sectors such as manufacturing, healthcare, and IT deploying 5G solutions for applications such as remote monitoring, precision surgery, and cloud-based services.

He acknowledged though that the large-scale technological deployment presents challenges that the telecom is actively addressing.

He said building a robust 5G network requires significant investment in new cell sites and fibre optic backhaul, especially in remote areas, in addition to utilising different frequency bands compared to traditional mobile networks.

“Ongoing efforts are needed to optimise the network for seamless connectivity and efficient spectrum usage,” he noted.
 
Situation around Africa

Beyond Uganda, 5G continues to make inroads. A November 2023 report on the state of 5G globally, authored by the Global System for Mobile Communications, a lobby organisation that represents the interests of mobile network operators worldwide, provided some insights on developments on the continent.
 
According to this report, as of September 2023, 27 operators in 16 markets across the region had launched commercial 5G services with additional 10 countries making a commitment to launch 5G in the coming years.
 
It also showed that 5G coverage in the region is still mostly limited to major cities, but there is growing evidence that coverage is ramping up in some countries especially in major markets such as South Africa where it had reached 41 percent of the population as of September 2023.  
 
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