Tough times in telcos sector as new MTN boss Sylvia Mulinge takes office

When Sylvia Mulinge takes over as chief executive officer at MTN Uganda on September 1, she will have her work cut out.

Her appointment comes at a time when the country’s business environment is turbulent, and specifically, telecommunication sector that is grappling with increasing operational costs from high fuel prices, depreciation of the shilling, inflationary pressures and persistent power outages.

According to the outgoing CEO Wim Vanhelleputte, these factors will continue to impact consumer spending as well as input costs for the business.

The growing cut-throat competition has seen MTN Uganda shed a significant proportion of market share to 47.5 percent last year, from about 60 percent five years ago to rivals — Airtel Uganda, Uganda Telecom and Lycamobile — despite maintaining the market leader position . However, its subscriber base has been growing year-on-year to 16.7 million mobile users in 2021.

Leading companies

In a survey done by the regulator Uganda Communications Commission (UCC) last year, five leading telecom companies failed the test of service delivery with many recording drop calls.

Irene Kagwa Ssewankambo, acting executive director UCC, said cybersecurity and data protection threaten the trust and confidence of users of communications services.

Towards the end of 2020, a major hacking compromised the country’s mobile money network. The hacking was blamed for a security breach on a consumer finance aggregator, Pegasus Technologies, affecting bank-to-mobile wallet transfers, according to a statement by MTN Uganda.

That year’s Uganda Police Annual Crime and Road Safety Report showed more than Ush41b ($11 million) was lost through cybercrime.

Charles Mbire, MTN Uganda board chair, said: “I would like to welcome Sylvia Mulinge to MTN Uganda. I believe that her experience will be beneficial to MTN, particularly given her alignment to our strategic intent of leading digital solutions for Africa’s progress.”

Mr Mbire said the board is confident that Ms Mulinge will continue growing the company as a leading provider of telecommunications and digital solutions.

Ms Ssewankambo says Uganda telecom service providers also have to improve the quality of service delivery as drop calls persist on some networks. She cited masts as being key to coverage and quality of service.

Ms Mulinge will have to address the issue of growing number of scammers even as market players adopted the industry practices such as the multi-factor authentication (OTP plus PIN or password).

“This is actually a problem that is happening across the world even in developed countries like Australia, US and the UK. Raising awareness is thus very key to fighting fraud,” she added.

Last year, Yolanda Cuba, MTN Group vice-president in charge of the southern and East African region on a visit to Uganda said the Group’s operations face low data penetration in Uganda.

Data services

“Today we see more people using data services and yet the penetration is still low, more people are using mobile money, but there is room to transform it into the e-commerce platform to drive business in Africa. Ugandans are open to all these things, but as a telecom provider, we need to bridge whatever gaps still exist in terms of reach and pricing,’’ she said.

Reactions

Ugandans took to social media to criticise the appointment, with some arguing that after listing on the stock exchange and unveiling the slogan “Uganda is Home,” a Ugandan should have been appointed. Ms Mulinge got the same reception when she was appointed to head Vodacom Tanzania. It was opposed by then president John Magufuli and was blocked by the Tanzania Labour Commissioner, who denied her a work permit, which Vodacom protested.

Read: Tanzania refuses work permit for Kenyan executive

The statement did not explain the reasons for the government’s decision but media reports said that the authorities believed there were more experienced Tanzanians to take up the position.

Ms Mulinge becomes the first female to head Uganda’s largest teleco by assets and subscriber base, replacing Mr Vanhelleputte who has been promoted to a regional role as operating executive for the West East and Central African.

This article was first published in The EastAfrican