The financial implication of using shared infrastructure in telecommunication companies in Uganda: a case of Uganda Telecom Limited
MetadataShow full item record
The study scanned through the Telecommunications Industry and examined the determinants of profitability and strategies to improve it using shared infrastructure on Mobile Network Operators. Infrastructure sharing reduced the cost of operation to enhance the profitability of Mobile Network Operators. Telecom companies compete on delivery of quality services instead of building infrastructure through infrastructure sharing to achieve profitability. The study was guided with the three objectives: to assess the determinants of profitability in telecommunication companies in Uganda, to examine the impact of shared infrastructure on the profitability of the telecommunication companies in Uganda and to propose strategies of improving profitability using shared infrastructure in telecommunication companies in Uganda. The study used a qualitative design and unit of analysis was Uganda Telecom Limited (UTL). The unit of inquiry was staff at UTL. Primary data was collected from 25 informants using an interview guide and analyzed with ATLAS.ti: Version 20 Qualitative Data Analysis. Results revealed that determinants of profitability were size of infrastructure to lease, adequate liquidity to give mobile operators options to increase spectrum sharing, increase in capital employed to increase earnings per share to shareholders, expansion and innovation to extend services across the country, network integration to reduce cost of operation to increase net-profit margin, faster quality solution, strong internet bandwidth and level of financial reporting for the company. Factors were network management protocol, demand for telecom services, minimizing operation costs, fair competition, joint investment, strong facilitating infrastructure and business re-engineering to support profitability. Shared infrastructure has broadband network systems which cut down cost to foster competition on delivery of services needed on the market instead of infrastructure to influence profitability of the company. Through leaseback access of towers, fibers and cross-sector sharing monetizes the latent value of their assets to enhance profitability. Strategies were reviewing current pricing structure, provision of universal support services, universal broadband, unleashing innovation schemes to cut down costs, strong network and wide network base to improve profitability using shared infrastructure in telecommunication companies. The study recommends reviewing the current pricing structure to unlock broadband for all services retailed to customers, building strong networks and unleashing innovative systems to cut down costs to achieve profitability using infrastructure sharing in the Telecommunication sector.