The Death of Voice begins, as Ugandans crave for more mobile data

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[/blockquote]The communication industry in Uganda is dynamic with constant evolution of new ideas, constant change in customer usage patterns and ways of doing things. The advent of high-speed internet in Uganda has led to a penetration of smartphone usage. Ugandans are embracing the fact that these devices have a high affinity for data as they rely on the internet and mobile apps in order to get everything done. This means that telecom companies, app developers (read as start-ups) and other stakeholders need to embrace the dynamics of new innovations and ICT technological developments. With Internet access technologies like 3G and 4G-LTE available in most major towns of Uganda –which are the most populated– we’ve seen a high adoption of data as people reduce their dependence on traditional voice calling and SMS and these statics from the communication regulator UCC don’t lie. As voice traffic reduces and data increases, does this signify the death of traditional voice calling and SMS?

With a total of more than 2,815,763 registered new mobile subscriptions as of financial year ending June 2015, this represents a 14.6% growth in mobile subscription, and lower than the 15.5% subscription growth registered in the previous period (July 2013 to June 2014). Total mobile phone subscriptions now stand at over 21,910,948. With such an increase in subscribers you would expect an increase in voice traffic, but it is actually the reverse.

Internet Usage soars in Uganda

Internet subscribers

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For the period under review, the number of internet subscribers and users grew respectively by 44% and 52% resulting in a 37.3% internet penetration as of June 2015. The sector has continued to register positive growth in bandwidth usage. A 15.7% growth was registered resulting to a total bandwidth of 31,222.79 mbps up from 26,986.05 mbps realised in the previous year. As estimated, the number of internet subscribers and internet users continued to grow as illustrated below.

data traffic trend

A 10.6% and 48.3% drop in Voice traffic

In the review period, the on net traffic dropped by 10.6% (1,408,438,426 minutes), a larger drop than the 4.8% experienced in 2013/14 financial year. Off-net traffic dropped by 48.3% (1,070,394,171), reflecting a decrease in interconnect revenue compared to the 26.1% growth registered in the previous financial year. This is mainly attributed to the fact that instead of making a call across another network, one would rather send a WhatsApp message or call hence the huge fall in off-net calls. Surprisingly, both the international outgoing traffic and the international incoming traffic grew by 7.1% (18,508,701 minutes) and 7.7% (27,528,105 minutes) respectively. This is a positive development compared to the 2.3% and the 16.3% drops in international outgoing and incoming traffic respectively that were registered in the previous financial year.

Voice traffic trend 2015

For industry observers, the drop in voice traffic may not come as surprise as messaging apps like WhatsApp and Viber have support for Voice over the Internet. As Dignited reported, one would rather make a voice call over Whatsapp than making a traditional voice call due to the cost implications the net savings involved. Voice is dying, and data is taking over; but looking at this in the Mobile Network Operator’s (MNOs) point of view, the Operational expenditure of maintaining a mobile data network is higher compared to a traditional mobile voice network, since you have to pay for the high-speed bandwidth sea fiber cable access on top of other expenses that are similar to a voice network.

It’s a catch-22 for the MNOs, to either invest in a more expensive data network that is gaining popularity among the masses or in a relatively cheaper voice network. It all comes down to profitability for the MNOs and at the end of the day, the final cost will always trickle down to us the subscribers.