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Telecommunication equipment manufacturing

Telecommunication equipment manufacturing

Photo by Shutterstock

Telecommunication equipment manufacturing

Compare IOA
Country
Uganda
Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Technology and Communications
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Technology
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
20% - 25% (in ROI)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Short Term (0–5 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
26% of male and 16% of female Ugandans intend to acquire a smartphone within six months.
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Gender Equality (SDG 5) Industry, Innovation and Infrastructure (SDG 9)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
Quality Education (SDG 4) Decent Work and Economic Growth (SDG 8) Reduced Inequalities (SDG 10)

Business Model Description

Manufacture affordable electronic devices, such as mobile phones and tablets, for the national market and potential exports.

Expected Impact

Enable access to knowledge, information and economic opportunities through affordable mobile phones.

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

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Disclaimer

UNDP, the Private Finance for the SDGs, and their affiliates (collectively “UNDP”) do not seek or solicit investment for programmes, projects, or opportunities described on this site (collectively “Programmes”) or any other Programmes, and nothing on this page should constitute a solicitation for investment. The actors listed on this site are not partners of UNDP, and their inclusion should not be construed as an endorsement or recommendation by UNDP for any relationship or investment.

The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.

Investment involves risk, and all investments should be made with the supervision of a professional investment manager or advisor. The materials on the website are not an offer to sell or a solicitation of an offer to buy any investment, security, or commodity, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.

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Country & Regions

Explore the country and target locations of the investment opportunity.
Country
Uganda
Region
  • Uganda: Central
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Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

Technology and Communications

Development need
Uganda has a major challenge in attaining SDG 9 - Industry, innovation and infrastructure.(III) Technology is indicated as one of the key drivers for Uganda’s socio-economic transformation – described as fundamental for the country's development.(I)

Policy priority
Uganda has embraced technology, yet not sufficiently enough to enhance its production and consumption patterns. The agenda prioritizes transforming Uganda into a knowledge society by 2025.(II) Transformation will be driven by processes for a smart e-government and innovations that reduce the cost of doing business and supporting data management.(II)

Sub Sector

Technology

Policy priority
Technology and communications remain a cross-cutting issue in the majority of key strategy and policy documents such as Vision 2040 and the 3rd National Development Plan III 2020/21 – 2024/25.(IV),(V) The government wants to support access to information communications and technology (ICT) by scaling the local production of smartphones and computers thus lowering their price.(V)

Industry

Hardware

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Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

Telecommunication equipment manufacturing

Business Model

Manufacture affordable electronic devices, such as mobile phones and tablets, for the national market and potential exports.

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Business Case

Learn about the investment opportunity’s business metrics and market risks.

Market Size and Environment

Critical IOA Unit
Describes a complementary market sizing measure exemplifying the opportunities with the IOA.

26% of male and 16% of female Ugandans intend to acquire a smartphone within six months.

26% of male and 16% of female Ugandans intend to acquire a smartphone within six months.(5) The information and communications technology (ICT) sector showed significant growth between 2014/15 and 2015/16, from 6.6% of the country's gross domestic product (GDP) to 8.7%.(4) Sectoral estimations showcased an average growth rate of 19.7% annually.(25)

In 2018, only 44% of the population had a mobile subscription, translating to just over 19.8 million people.(4) 98% of Uganda's population is covered by 2G networks, while 78% is covered by a 3G network.(4)

In Uganda, 26% of men and 16% of women declared an intention to acquire a smartphone in the next six months.(5) In 2017/18, 84.2% of the population did not own smartphones.(2)

Indicative Return

ROI
Describes an expected return from the IOA investment over its lifetime.

20% - 25%

Benchmark statistics for the electronics manufacturing sector estimate a return rate of 20% to 24%. This rate is a benchmark calculated as a cost of equity with a country risk premium, reflecting an average return required by investors.(22)

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Short Term (0–5 years)

A consulted company started production in 2020 and sold 400,000 phones to the market, which allowed it to recover their investment within one year.(27)

Market Risks & Scale Obstacles

Business - Supply Chain Constraints

Insufficient mobile network coverage negatively influencing demand (4)

Business - Business Model Unproven

Affordability of a product as a major constraint hampering demand (4)

Business - Supply Chain Constraints

Limited skilled and managerial labor resources for production.(20) Limited access to large-scale finance and support from local institutions to establish manufacturing operations.(20) Transfer of technology required for manufacturing.(21)
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Impact Case

Read about impact metrics and social and environmental risks of the investment opportunity.

Sustainable Development Need

While SDG 5 - Gender Equality and SDG 9 - Industry, Innovation and Infrastructure show moderate improvements, important challenges remain in terms of access and affordability of technology, mobile phones and communications.(III)

In Uganda, almost 72% of the population had mobile phones in 2017/18 (2), but the smartphone adoption is just 16% in Uganda compared with 30% in Sub-Saharan Africa.(4)

Affordability of devices and SIM cards is considered the top barrier to owning a mobile phone by 48% of men and 41% of women in Uganda.(5)

Gender & Marginalisation

There is a wide gender gap in mobile phone ownership, with 84% of men owning a mobile phone compared with only 69% of Ugandan women.(5)

There are also significant gender disparities in access to mobile networks between rural and urban areas. Urban areas have a 4% gender gap in mobile ownership, while in rural areas it is more than 5 times more at 22%.(5)

Overall, mobile phone ownership is 78.5% in urban areas, compared with 65.7% in rural areas.(2)

Expected Development Outcome

Improved knowledge and information transfer; improved trade balance due to import substitution

Reduced income barrier against possessing a mobile device; increased number of high-skill workplaces and manufacturing workplaces

Reduced price of smartphones and hardware in the country

Gender & Marginalisation

Owning a mobile phone contributes to women's empowerment. Surveys indicate mobile phones help women stay connected to friends and family, save their time, make them feel safer, give them independence and help save money.(3)

Primary SDGs addressed

Gender Equality (SDG 5)
5 - Gender Equality

5.b.1 Proportion of individuals who own a mobile telephone, by sex

Industry, Innovation and Infrastructure (SDG 9)
9 - Industry, Innovation and Infrastructure

9.2.1 Manufacturing value added as a proportion of GDP and per capita

9.2.2 Manufacturing employment as a proportion of total employment

9.b.1 Proportion of medium and high-tech industry value added in total value added

Secondary SDGs addressed

4 - Quality Education
8 - Decent Work and Economic Growth
10 - Reduced Inequalities

Directly impacted stakeholders

People

Young population and workforce, society in general

Gender inequality and/or marginalization

Women, especially in rural areas, with greater access to information and economic opportunities

Corporates

Micro, small and medium enterprises, mobile service providers

Outcome Risks

Increased amount of e-waste generated (17)

Possible pollution arising from manufacturing activities (18)

Potential negative impacts on health, including concentration problems, sleep problems, impaired vision, impaired physique (19)

Impact Classification

B—Benefit Stakeholders

What

Likely to have a positive impact by reducing inequality and exclusion. Establishing hardware manufacturing facilities will create decent workplaces.

Risk

Although mobile phones are already under production in Uganda, risks connected with competition, natural environment and pricing (and therefore revenues) remain.

Impact Thesis

Enable access to knowledge, information and economic opportunities through affordable mobile phones.

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Enabling Environment

Explore policy, regulatory and financial factors relevant for the investment opportunity.

Policy Environment

National ICT Policy 2014: This policy describes the government's agenda to transform Uganda into a knowledge society by improving access to mobile networks.(6)

National Industrial Policy: This policy describes constraints and challenges in the manufacturing sector, together with solutions and government interventions. It also outlines priority investments for developing industry and manufacturing in Uganda.(23)

Rural Communications Development Policy for Uganda 2009: This policy targets rural communities, which are underserved in terms of coverage and connectivity, to support Uganda's information and communications technology (ICT) industry.(9)

Industrial Policy for Economic Transformation in Uganda 2020: This policy recognises electronics as one of the most important manufactured goods for Uganda's transformation.(8)

The government promotes local manufacturing through the policy 'Buy Uganda Build Uganda', launched in 2013.(26)

Financial Environment

Fiscal incentives: Plant and machinery - payment of value added tax (VAT) at importation on plant and machinery is deferred to a future date.(15) Exemption of tax on income derived by an operator in an Industrial Park or Free Zone who invests in information technology.(15)

Other incentives: Uganda offers an indefinite Initial allowance and depreciation allowance (15), such as the Initial Allowance. This allowance offers a capital deduction of 50% on qualifying plant and machinery and 20% on industrial buildings within 50 km of Kampala's boundaries.

Regulatory Environment

Trade (Licensing) Act: This Act describes the requirements and licensing process for anyone involved in wholesale or retail of goods.(10)

Data Protection and Privacy Act 2019: This Act regulates the collection and processing of personal information, as well as disclosure and use of personal information.(11)

Collective Investment Schemes (Conduct of Business and Miscellaneous Provisions) Regulations 2007: These regulations provide requirements for communications, responsibilities and compliance and reporting by investors.(13)

The National Information Technology Authority regulates all issues related to mobile networks and connectivity in Uganda.(12)

The Ministry of Trade, Industry and Cooperatives is responsible for issuing regulations and policies regarding manufacturing activities and trade in Uganda.(14)

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Marketplace Participants

Discover examples of public and private stakeholders active in this investment opportunity that were identified through secondary research and consultations.

Private Sector

SIMI (Engo), Copia, Tecno, FERO, Huawei, Xiaomi, MTN Uganda, BMCE Bank of Africa

Government

Ministry of Investment and Privatisation in Uganda, Ministry of Trade, Industry and Cooperatives

Non-Profit

UKAid, GSMA, United Nations Industrial Development Organisation (UNIDO), United Nations Education, Scientific and Cultural Organization (UNESCO), United Nations Conference on Trade and Development (UNCTAD), African Development Bank (AfDB)

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Target Locations

See what country regions are most suitable for the investment opportunity. All references to Kosovo shall be understood to be in the context of the Security Council Resolution 1244 (1999)
country static map
urban

Uganda: Central

The majority of the skilled workforce can be found in the urban Kampala and peri-urban Kampala region.(16) A skilled workforce is necessary for manufacturing technologically advanced devices.
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References

See what sources were used to establish the investment opportunity’s data and find resources that could be consulted to explore more.
    • (I) National Planning Authority. National Development Plan III (NDPIII) 2020/21 – 2024/25. (II) Ministry of Information and Communications Technology (2014). National Information and Communications Technology Policy for Uganda. (III) Sachs, J., Schmidt-Traub, G., Kroll, C., Lafortune, G., Fuller, G., Woelm, F. (2020). The Sustainable Development Goals and COVID-19. Sustainable Development Report 2020. Cambridge: Cambridge University Press. (IV) Government of Uganda. Uganda Vision 2040. https://consultations.worldbank.org/sites/default/files/materials/consultation-template/materials/vision20204011.pdf (V) National Planning Authority. National Development Plan III (NDPIII) 2020/21 – 2024/25.
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