Uganda: Telecoms Splash Cash As Race for Clientele Stiffens

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The Monitor (Kampala)

5 August 2008
Posted to the web 5 August 2008

Elias Biryabarema

The dueling amongst telecom companies is unfurling awesome and the not-so-awesome innovations produced to maximise the utility of their services to customers and possibly lure some from rivals.

The companies now realise that the edge of competitiveness is unique innovations that add critical value to customers as the key.

With each company rolling off a tariff promo--some blindingly successive, some simultaneous--the outcome has been a harsh pitch with subscribers unable to decipher which tariff option is cheaper, convenient or suitable to what circumstances or place.

There is however an unintended consequence coming off the latest blitz of promos, something of a sideshow playing out amongst the consumers: confusion.

In October last year UCC suspended airtime promotions that were then being run by all the three telecom companies: UTL, MTN and Celtel apparently after their networks were overwhelmed by the surge in tariff.

MTN's MTN Zone is the latest tariff discount offer, which, according to the company, allows customers to make calls with charges as incredibly low as Shs1.

Now, the company claims in just four days 800, 000 new subscribers had joined its network by Friday. MTN Zone allows customers on per second billing to enjoy savings of between 10 percent and 99 per cent depending on location and time of call.

"The customer response to MTN Zone has by far exceeded our expectations," MTN's Chief Commercial Officer Erik van Veen said of the innovation.

It is the first time the innovation is being used in Uganda and East Africa but it has been rolled out in other MTN markets such as South Africa, Swaziland, Benin and Guinea Bissau.

Up until now, promotions have been offering what you may call standard fare: reduction on call charges, addition of bonus airtime every time you load your phone or complete elimination of charges on calls made at odd hours.

Warid, which launched commercially on February 7, has had the most breathtaking promos this year. As a late entrant, the company devised one of the most ingenious creations to attract subscription.

For nearly two months it decided to charge only the first two minutes of any call, leaving customers to a blabbering bonanza christened Bang KB For Free.

But that drastic tariff discount offer was mouth-watering, its impact in the marketplace was limited by the fact that the promo, as with all others, applied only to intra-network calls.

Warid's subscriber base stands at an astonishing 500,000 customers helped by the better level of awareness and improved quality of life for Ugandans.

It is the fastest growth ever recorded for a new telecom entrant since the dominance of Celtel Uganda [now Zain Uganda] in the mid 90s.

When the two-minutes-only promo, described by the company as a great success, ended, the tap for freebies was only briefly closed and then opened again, this time gushing extra airtime to a customer for whatever value they load on their mobile handset under the "24HRS Free Calls, Megabonus," promo campaign.

UTL is currently offering free calls under the Bona Bogere competition where customers are randomly picked and rewarded. "Our major goal at Uganda telecom is to provide access to affordable communication to our customers," said Mark Kaheru, the company's publicist.

Celtel has not run airtime discounts lately perhaps owing to their re-branding preparations that were unveiled on Friday. Celtel Uganda now becomes Zain Uganda and hopefully the new pink, black and green colours will inject a much needed freshness.

With the scale of provocations from competitors though, it's inevitable that Zain Uganda will respond but the extent of its response is yet to be seen.

Relevant Links East Africa Economy, Business and Finance Company News ICT and Telecom Industry and Infrastructure Uganda Urban Issues and Habitation

Zain's One Network product however gives it a far greater edge when it comes to international calls across the African continent. The One Network product offers 'local calls' to subscribers in 14 African countries who make inbound calls across borders to places where Zain has services. It is also for clients in the Middle East.

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