Uganda internet boom spins cash for technology start-ups

7th Feb,2012

Sitting in the glow of his flat-screen computer monitor in a fashionable office, Donald Kasule says that until recently it was almost impossible to imagine making a success of an Internet start-up in Uganda.

When he first had the idea several years ago for his “Wedding Bells” website - a flashy site to help couples plan for their big day - exorbitant connection fees and slow speeds limited demand for the service.

The website struggled to attract more than a few hundred users - and most of those were Ugandans living abroad. But, as cheaper technology has flooded the market and the cost of going online has plummeted, internet access has boomed, especially among the growing middle class.

Kasule, 33, says his website is surging in popularity, now enjoying up to around 4,000 hits on a good day, and he says that he is looking to expand. “The number of people going online from their homes and offices has increased a lot,” Kasule says. “The growing market is there and it has the potential to be a real success.”

Industry experts say affordability and speed have revolutionised Internet use.
“It’s been a revolution in the sector over the past few years, and the change has really been radical,” said Michael Niyitegeka, a computer science lecturer at Makerere University in Kampala.

Niyitegeka says a major breakthrough came in 2009 when East Africa was finally connected to Europe and Asia by an undersea fibre optic cable. Before that, internet access via satellite link-ups was cripplingly expensive and slow.

Since then, Ugandans with some spare cash have been able to surf the web without bankrupting themselves. Now, middle-class professionals can check their e-mails over wireless internet or portable modems in smart cafés around Kampala. For a few dollars a month, Ugandans can access the internet on mobile phones costing less than $100 (Sh8, 700).

By 2010, the number of internet users in Uganda had risen to four million: just over 10 per cent of the population, according to the Uganda Communication commission.
And researchers say rapidly growing internet use is a key marker of the increasing clout of the middle class across the continent, which today accounts for one in three Africans.

In a report released in April the African Development Bank estimated that about 18.7 per cent of Ugandans— or 5.9 million people— can now be considered middle class.
For Africa as a whole, the number of internet users increased from about 4.5 million people in 2000 to 80.6 million people in 2008, the AfDB report said.

Despite the progress, however, analysts admit that Uganda’s internet sector is still in its infancy, with few Ugandans using online services such as banking and shopping.

The Monitor News paper