About Me

I am A Chartered Certified Accountant who does a bit of gardening.
The Pictures of the flowering and non-flowering plants, fruits, vegetables, culinary & aromatic herbs
in this blog are of my garden.
Most of my garden collections are driven by the Fs: They either Flower, have a Fragrance, provide Flavor, bring Fruit, Food or are air Freshening.

Wednesday, 24 February 2016

Revenue lost as ‪#‎UgandaDecides

No social media and no mobile money services for 3 and ½ days! Unimaginable in this era when Rwanda has almost 400 buses connected with free 4G internet and the rest of the world is talking about #internetofthings, anyway that's what Uganda decided.

It is said that nearly 20 million mobile money users were unable to access the service for these days. In an article in the Uganda's Daily monitor dated 22nd February 2016, the writter, Mark Keith Muhumuza, states that as at the end of October 2015, MTN revealed, at least, Shs1.8 trillion was seamlessly moving through MTN Mobile Money platform per month.

On average, MTN Uganda has about Shs60b worth Mobile Money transactions each day. On each fee charged to withdraw money by a customer, the telecom company earns a percent and the agent also gets a standard commission. MTN alone accounts for 54,000 agents countrywide who rely on customers transacting business in order to make money. The other telecom companies of the likes of Airtel, Africell, Vodafone and UTL equally had their platforms and agents adversely affected by the UCC freeze. One can only imagine the multiplier effect to the revenue lost.

Utility bills, pay TV services, street parking and various other businesses transact using mobile money. Notably, Umeme reveals that each month, Shs12b of Shs120b worth of collections are made using mobile money.

Just to sample a few, below are winners and losers as Ugandan’s went to the polls.
Losers during the 3 day shutdown:
1) Telecom companies: Colossal revenue forgone in terms of data bundles not purchased by the avid social media users who didn’t download VPN. Not to mention % earnings from their agents
2) Mobile money agents: Commissions forgone due to transactions missed out during the shutdown
3) Vendors: Revenue lost from the customers whose monies were stuck in the mobile money system
4) Fuel stations: Generally people were rendered immobile and holed up at home.
5) Café’s and entertainment businesses: Revenue lost from would be customers who could not easily coordinate and rally each other to eat out
6) Etc.....

Winners of the 3 day shutdown:
1) Mobile money alternatives like PayWay which people used to settle their utility bills
2) Airtime? Probably people buy more to compensate absence of social media
3) Spendthrifts whose wallets were mobile money. Their monies remained intact.
4) Families who had their loved ones literally grounded at home. We presume they had quality time with no alternatives on offer.
5) Families whose loved ones were not able to download VPN and were not distracted by ‘screen time’ caused by social media. We presume they too had intense family time
6) Etc....

It is said that the mobile money services and social media were taken down due to “national security reasons.” The action however had far reaching effects that the economists and financial analysts need to tell us the true impact on our business.
For every business owner, risk management should be key in your agenda. When is the last time you critically assessed the elements in your PEST(LED) analysis?

Food for thought…

Photo credit: http://mobilityarena.com