Four businesses in Uganda which are dead… or are dying

By Joseph Lubandi

Posted on December 15, 2017

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There was a time when owning a phone booth in a busy trading centre was a reasonable guarantee for taking home a tidy profit after a day’s work. When mobile telecom firms opened for business in the mid to late 90s one of the first things they brought to an end was the monopoly which government-owned Uganda Posts and Telecommunications Company (from which utl emerged) enjoyed.

Telephones suddenly ceased to be a luxury. Whether mobile or landline, acquiring a telephone gradually became much less painful than it had ever been, and some Ugandans with a sharp eye for business were quick to seize the opportunity and offer a service—c onnecting those who could not yet afford their own mobile handset by operating their own phone booths using landlines or in some cases, mobile phones. A single unit (about 50 seconds) according Moses Musinguzi who operated such a business in Wandegeya, would cost about Shs500 back in 2007.

“On a good day, I would even make Shs100,000. But things have now changed,” he said. Where one was sure to find a phone booth in every 200 metre radius, it is quite possible today to walk a distance of four kilometres in search of a provider of such a service—and still not be lucky.

Death of the phone booth
Ten years or so since the phone booth reached its peak, the business is no more. The moment Uganda’s phone market started welcoming brand new mobile handsets selling for as little as Shs20,000, the days of the phone booth were over, as this newfound access left nearly half of Uganda’s population owning a phone. What, however, really put the final nail in the coffin of the phone booth was the entry of Warid Telecom into the market in 2008. With Warid’s entry came slashed call rates. Phone owners who had in the past paid roughly Shs540 per minute for calls were now paying less than half that amount, and the mobile phone user got introduced to voice bundles shortly after. The phone booth was officially out of business. Little wonder that Musinguzi, like many others who were involved in the business, resorted to things like mobile money agency and selling airtime.

Soon to follow… Internet cafes

If there is a type of business owner who shares in the pain of the phone booths people, it is the internet café operator. In 2008, Rosette Akankwasa was doing well by any standards as an administrator of a cafe in Kikoni, Makerere. On a good day, she would gross between Shs70,000 and Shs100,000, but that story has since changed.

“These days, almost every student at Makerere has a smart phone. Data is as cheap as Shs200, now who would think of an internet cafe?” she wonders.

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Akankwasa told Matooke Republic the income from selling internet time has since dropped so much it is “normal” for her to make profits of just Shs10,000 or even Shs5,000 a day. She has since turned the cafe into a stationery shop.

An increase in the number of smart phones and a reduction in the prices of data has forced café owners to reduce prices to retain customers, and even that isn’t really working. Saul Mugambwa, who operates the business in Kireka recalled how only five years ago he could charge Shs1500 for 30 minutes. Today, it costs only Shs500 for the same amount of time, and there will only be seven to eight customers at most in his café, despite its capacity of 12 computers. In fact, more people, he said, come in during the day to get their work typed than those coming in to surf. It is the reason he converted part of his double room premises into a gaming parlour.

On life support; video libraries

Hanging on for dear life is the video library. Any Ugandan who just turned 15 may never appreciate the fact that his parents treated a video library membership as a matter of pride when they were teenagers themselves in the early 90s. Even as technology evolved and video libraries upgraded from the cassette to the CD and later DVD, cheaper internet and more affordable pay TV happened and who wants to sign in and out of a video library when for Shs2,000 to 5,000 they can purchase a bundle and watch movies until the following morning?

Going… Airtime scratch cards

When reports appeared both on social and in mainstream media mid year that there were some airtime vendors who were selling airtime scratch cards with a Shs200 surcharge for airtime cards of Shs1,000, it was immediately obvious to see that the days of the airtime selling business were numbered. And how the biggest telecom companies responded was telling. MTN Uganda said in a statement the practice was illegal, but it went on to encourage subscribers to buy their airtime using mobile money, in effect cutting out the airtime seller. Returns on airtime sales were already laughable—in the best of times, a vendor earned Shs400 off a Shs10,000 voucher. That figure dropped to Shs300 after various deductions were introduced, which is why small time retailers attempted to pass on the new costs by charging Shs1,200 for an item whose cover price is Shs1,000. That’s what the last kicks of a dying horse look like.