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Orange heats up market

By Patrick Kagenda

When Orange Telecom, the fifth telephony company on the Ugandan market, launched its operations on Tuesday Mar 10, existing players reacted in different ways.

MTN (Uganda) Chief Marketing Officer, Mr Isaac Nsereko, told The Independent that five operators are too big for the Ugandan market which is a small economy.

“But we will always remain the market leaders. There is no way we can let our competitors take over the market,” he said.

Just a day before the Orange launch, MTN which is the second oldest of the mobile telephony operators, had launched a new service dubbed “MTN Mobile Money.

Another operator, UTL is in advanced stages of launching a similar mobile money service.

Its Corporate Sales Manager, Mr Michael Manzi, told The Independent that the increasing competition has led operators to bring mobile convergence with services like television, radio and other high value services.

Uganda’s oldest operator, Zain, also plans to introduce such a service called ZAP, according to Mr Fred Masadde, Zain head of Corporate Affairs.

“Zap is much more than a mere money transfer service. It is a suite of services. With Zap, one can transact on their bank accounts (check balances, make transfers, pay bills) as well as the basic money transfer. It is like having a debit card on your phone and more,” he said.

“Business is now going to change and people will be looking at total solutions offered by a telephony company not just voice,” said Manzi.

Orange’s entry is unlikely to hurt UTL which boasts wide infrastructure and provides solutions for big corporate institutions like banks, power providers, and government institutions like the Uganda Revenue Authority (URA).Manzi said in spite of the market being saturated, there are still opportunities in the countryside.

Nsereko says MTN is already more rural and will continue expanding its services in the rural areas because this is where more emphasis is needed. “Look at the north where people have been living under war for all that long. We need to bring our services to these people,” he said.

Experts say that Uganda’s telecommunications industry is still growing.

Orange Telecom was formed when France Telecom acquired a 53% stake in Ugandan wireless wannabe””HITS Telecom, which retained 47%.

The transfer of HITS’ national public infrastructure provider (PIP) and Public Service Provider (PSP) licenses to the new company was given approval by the regulator, Uganda Communications Commission (UCC) late last year.

HITS Telecom’s other shareholders include International Investment House (IIH, an international investment firm based in an Abu Dhabi), Al-Awael Holdings, Ali Mohamed Abas Khouri and Veritas Communications Limited. In East Africa, Orange is operating in Kenya and Tanzania. Officials of Orange telecoms (U) during the launch of their services admitted to entering a market with stifling competition but were optimistic they would become the number one telephony company in Uganda as was the case in Central Africa in 2007 and other West African francophone countries.

With the stifling competition on the Ugandan market how does Zain ensure what happened in the 90`s does not reoccur? To this Masadde quickly adds, “Those were mistakes of the 90’s. We learnt from these mistakes and we have become a much more resilient business, a business that understands the needs of the customer and delivers relevant solutions and is bound to have a reasonable measure of success. I think over the course of the last few years, we have proved that we are that kind of business”. As to the 2 million clients and how they derive to that figure Masadde says “That number is not indicative of our customer base. At Zain we pride our selves on having very loyal customers. And the key to that is in the word “˜loyal’. You can only claim loyalty if a relationship has been built over time. Some of the figures for customers that you come across may refer to all those that have ever been on that network irrespective of whether they are active or not. We use the daily validity method wherein we look at only those customers that are active over a period of 90 days. So those who are only there for a short time will not be considered customers after the 90 day period. In this way, we do not delude ourselves as we get a much truer picture of who our customers are, and have the added advantage of helping us to plan properly for those customers.

 

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