KAMPALA: MTN Uganda, one of the leading telecommunications companies and mobile providers in the country, believes that rising inflation and increased competition will adversely affect its profits for the next reporting period. “Some of the real challenges include price erosion by competition … and the fact that inflation at about 18 percent to a certain extent negatively impacted us as far as growth is concerned,” CEO Sifiso Dabengwa told a news conference in the Ugandan capital Kampala. The company did see its subscribers expand by more than one million users through the end of June during the last fiscal year and hopes it will be able to add an additional one million customers through the second half of this year. They are not the only company that is worried over the future of telecom in the country. With the industry saturated with companies, and price wars causing a reduction in overall profits, MTN has said that in order for Uganda to become a leading economy based on telecom, the country only needs three operators. MTN Uganda Chief Executive Themba Khumalo said the company's average revenue per user (ARPU), a key industry measure of performance, had declined to about $4 in the first half of 2011 from $6 about a year ago. BM
