US technology company CTI Africa will set up a phone assembly plant in Uganda next year, for the African market.
This past week, the company's trading arm LifeMobile said it would invest $10 million into the venture which will be supervised by Uganda's National Enterprise Corporation (NEC).
State Minister for Investment and Privatisation Evelyn Anite said the project is part of the government's plan to reduce the number of mobile phone imports and save the country foreign exchange.
NEC spokesperson James Katongana told The EastAfrican that the phones will have localised applications to solve local problems -- like the weather forecast, insurance, healthcare and financial services.
Three smartphone models -- low range, mid-range and a tablet -- will be assembled by the company starting next January.
"The market prices are not yet set, but when the phones reach the market early next year, they will compete with the ones already there. Because they are locally manufactured, they will be protected," Mr Katongana said.
The protection, Ms Anite said, will be in the form of tax barriers on imported phone products similar to those manufactured locally.
According to the Uganda Revenue Authority, the country imported phones worth Ush125.7b ($33m) in the first half of 2018.
Tecno imported about 22 million handsets, followed by Itel with 12.5 million.
Largest market share
Tecno has an assembly plant in Ethiopia to service the continental market with handsets that suit the African user. The company has the largest smartphone market share in Africa. It is now considering establishing a plant in Nigeria.
LifeMobile becomes the third foreign company seeking to start a smartphone assembly plant in Uganda after China's Xinlan Group, which is now poised to take majority share in the struggling Uganda Telecommunication Ltd after a proposed $10 million investment.
The third company is another Chinese firm, Sim, which has already been allocated land to build a plant.
Phone assembly is sweeping across the region. Last month, Kenya's ICT Minister Joe Mucheru said the government had set aside Ksh1 billion ($10 million) to grow local startups in the mobile telephone software and hardware segments.
Mr Mucheru told a meeting of the ICT industry in Nairobi that he was concerned by the country's imports of 50 million telephone handsets every two years.
Last week, Tanzania announced plans to assemble phones after IPP Tanzania Ltd partnered with Dubai-based firm Touchline to set up an assembly plant in the Mikocheni industrial area in Dar es Salaam, which is expected to lower the prices of phones.