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Uganda Report

Marcopolis presents the Uganda Report focused on topics such as economy, investments and doing business, featuring interviews with Uganda's leaders. The sectors under review in this issue are agriculture & agribusiness, health & pharma, hospitality & tourism, industry, insurance, mining & petroleum, services and many more. 

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InterviewsFebruary 13, 2020

Business Leader Charles Mbire Discusses Telecoms and Shares his Vision for Uganda

Charles Mbire, Chairman of MTN Uganda
Charles Mbire, Chairman of MTN Uganda
Written by Sandra Francisco
Published: February 13, 2020

Interview with Charles Mbire, Chairman of MTN Uganda

What is your assessment of the telecom sector in Uganda?

The telecom market in Uganda has many players. It has reached maturity but the tele density is still less than expected so there is still market potential. Currently, the market is evolving. It is migrating away from voice and heading towards fintech. We also have a band television. Value added services are the future. We are optimizing in farming and education. Other sectors are also evolving. Revenue will be earned from broadband and other parts of telecoms. We are preparing ourselves to move into those other sectors which should bring a lot of value and revenue.

How prepared is Uganda for that compared to the other countries in Africa?

The advantage Uganda has is that is has the youngest population in the world. That young population can easily adapt. They are the real market for these services. It is a booming economy and one of the fastest growing economies. With the growth is the demand and the awareness of the value these economies bring because they add business velocity. We are very positive in that we are growing along with the growth of the economy and the growth of the population.

Will this growth continue? Will the election coming soon change your perspective?

We realize that the products are always changing. A month in telecom is a generation. You have to keep up the pace with your R&D to research and understand what the market needs, what is adaptable, and what is affordable.

The perspective will not change, but there are many external shocks that come and disrupt our vision and planning. In reality, we have the demand. We are looking at the oil sector. We are looking at also migrating into commercial agriculture. We will remain on the right path. Given the historical political stability and security in the country, we are moving in the right direction. The external shocks that keep coming up like currencies, external trade wars, external diseases, global warming and changing weather patterns we cannot get away from. However, we are preparing ourselves and we are confident. The only issue will be if there is an election year, which is quite unpredictable in African countries. But we are robust and we are positive that our growth will continue.

Is the telecom sector competitive?

It is quite competitive. It was opened up but we already feel that we are doing the right thing. We are customer centric, we are above board, we are very clear, we are the biggest taxpayer, we are a very good corporate citizen, and we give back to society through CSR channels. We give a product which offers value for money. This market is a market for two or three players. So, with an open policy, people will come in and people will fall away. Even a giant like Vodacom was here for two years then failed. We will continue to give the customers value for money.

How does MTN stand out from the competition? What is your competitive advantage?

MTN was started 20 years ago in Uganda. Because of the many wars this country had seen, there was a vacuum that we call “negative tele density growth”. That vacuum was filled by a mobile telecom company that was very expensive. Their business plan was based on postpaid which was not the right product for this market. We came in, did our research, and we realized that prepaid is the secret for success in Uganda. We launched with our prepaid products that were affordable and we took over the Ugandan market. We packaged our products based on the demand of the Ugandan market. That was our competitive advantage. We knew Africa. Our package from the very beginning was Ugandan friendly. That has led our growth, our expansion, and our success. We have never imported business plans from outside, but rather we have made them in Uganda.

How does this work today?

We realize that the products are always changing. A month in telecom is a generation. You have to keep up the pace with your R&D to research and understand what the market needs, what is adaptable, and what is affordable. You must know the direction of the demand and the supply of the products on the market and most importantly, acceptability. Right now, the uptake average age is getting lower and lower. Your product offering must address that. There is gaming, education, banking, security, medical. Telecom is no longer just voice and SMS. It has expanded into other fields. We must now start to choose and segment the fields we want to be in. We are now diversifying away from infrastructure headaches like towers and other areas that we cannot manage and we are outsourcing them. We must remain focused on our core areas in the industry so that we can perfect them. We want to find the areas where we have proper advantages.

How open are you to international partnerships or joint ventures with international fintechs for a technological edge?

We are very open to that. As the Chairman of the company, my mandate is to maintain and improve shareholder value. If anyone comes to us with a way to give us value add that will increase value for our shareholders, we are very open to it. We have created APIs for product development where you can come and connect to our system. The same kind of business model which is used by Apple for their products we have now introduced to Uganda. We are encouraging young entrepreneurs and international partners. They can apply to us through the open API where we connect you to our system, you can do a prototype on our system, and then test it. We then discuss revenue share and legalities and then we have a product together for the market. We have a ready market for 12 million customers in Uganda. If it works well in Uganda, we have a ready market for over 200 million customers through the Group.

What is an example of this program?

We have quite a few products that have been try tested including mobile games, agricultural products, and foreign remittance products. We have an open policy on that and we empower people.

What has made your success?

It is realizing a philosophy where big over small is better than small over big. We also have to realize that we have limited capacity so you must partner with people who have resources, management skill, and most importantly, continuity beyond yourself. That is what I realized when I interacted with international companies. Also, they bring on skills, international expertise, and give training to manage finances, people, etc. They have experience that we never had. With all my business that I do, I always partner with reputable international companies. Their above-board policy and transparency in recruiting, management, and appraising is something I learned in business school in London. You go away from local patronage and local politics and that gives you an edge. It helps you fight. You lose battles, but you win wars with the attitude that they bring to the table.

What do you bring to the country in the energy sector? What is your competitive advantage?

I was involved in the energy sector in bringing in emergency power, constructing power stations, and also the production of cement with partners from Kenya. The partners bring in specialized services. I am the kind of man that is eyes on but hands off in business. I let people manage and I just watch from afar and ensure that everything is transparent and above board. That is a big difference that I have. Above board means that we operate according to international set rules and standards that are clear and transparent. Operating in some of the most corrupt countries in the world and still walking with your head held high is not easy. But we have learned to train ourselves to be robust and it has worked very well. We have very good, understanding business partners who have been very patient. We have been voted as the most respectable company by the PwC audit for the last five years and we remain as such.

What is your relationship with the shareholders?

The situation is very good. We have credible, reputable partners and we have been together for a long time. I always consider business partnership as a marriage. You may have problems along the way, but you go in together for the long run. As long as you are transparent with each other and trust each other 100%, things will always work out. Our relationships have been very clean, clear, and comfortable.

What are the major challenges that the telecom sector faces?

We always feel somewhat vilified for being efficient and transparent. We have become the low hanging fruit for the tax authorities and others to poke and harass because we are efficient. We declare everything. Sometimes, it seems like we are not trusted because we are transparent and above board, but we will never change and our intentions are always very clear.

Can you manage this at a high level? Do you have a relationship with the government here since you have been here for such a long time?

There are always skirmishes. The beautiful girl in the village will always be either the prostitute or the witch. There will always be people who are unhappy with success. It is natural. In the end, when you are transparent, you fear nothing. The only two things you can be sure of in this world that will come out in the end are the sun and the truth. If you are on the side of truth, there is nothing to fear. In the end, truth will always come out. We are very confident in this and that is why we walk with our head held high.

What do you want to achieve in the medium term, two to three years’ time? What is your ambition?

I personally want to start mentoring young businesspeople. I want them to understand that you can do business transparently and still succeed. Shortcuts are very expensive. Warren Buffet once said that he is not rich enough to buy cheap. I want to also educate the youth coming in after us that spiritual wealth is more important than material wealth. I want to pass that philosophy to the next generation. We are empowering and improving humanity. We are empowering and improving security. From our system, we are fighting crime, improving health, bettering education. From our system, we have social inclusion in banking. In farming, we let the farmer know the true value of his crops, the right exchange rate for his products. Do not look at only the revenue side. Look at the multiplier effect of our actions on humanity.

What is your vision for Uganda? Do you see it developing well?

From our actions and businesses, showing examples of the ability to succeed, we help to generate a new crop of business leaders. Those, in turn, will help improve society, get rid of corruption and political patronage, get rid of layers created to disable business performance. All those artificial layers that are created by corruption and patronage, the local citizen is the one who pays for them in the end and they are not happy. You cannot live in a country with unhappy people. You are wasting your time. However successful you are, if the people are unhealthy, you will become unhealthy. If they are sad, you will become sad. We have to improve their well being by getting rid of those invisible layers that have put a tax burden on the local people. We do that by setting an example and refusing to be part of that clique that creates artificial layers that exploit people.

MORE ABOUT CHARLES MBIRE

WIKIPEDIA PAGE: Charles Mbire

VIDEOS:
• Charles Mbire Shares his Assessment of the Telecom Sector in Uganda
• Telecom Sector: What Makes MTN Uganda Stand Out From the Competition?
• MTN Uganda: Partnerships With Young Entrepreneurs and International Companies
• Uganda: Charles Mbire Discusses Doing Business in a Transparent and Above Board Way
• Charles Mbire: Mentoring of Young Businesspeople in Uganda and Vision for the Future

 

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