Friday, July 10, 2009

Warid Uganda To Cut Masts Costs By Getting Strong Wall Fences

Warid Telecom is to invest $10m (about sh20b) in the extension of power lines to all its masts across Uganda. The investment also involves the construction of perimeter walls around the masts; a move top officials said would cut the company's costs by up to 30% in the long-run.
Zul Javaid, the chief executive officer, said this week that more than 70% of the work had been done. He said the firm pays up to sh700,000 per month to security guards to protect each of its masts throughout the country. He said the company also pays millions of shillings in fuelling its numerous heavy fuel generators at its base stations.
"Building tough security walls around the masts once and for all and connecting them to the national grid will in turn save the company the expense of paying security guards monthly wages for night and day shifts and running the expensive generators which are too costly," Javaid explained.
"This will reduce the cost of operating the base sites by 30%, which will further ensure the sustainability of the business in these hard economic times. We have invested in hard construction to protect our masts to decrease the monthly costs.
"We have also invested more in extending electricity to these sites because Umeme [the national power company] has failed to do its work," said Javaid.
One of the biggest challenges that telecoms face is the spiraling operations costs due to the rising electricity and fuel charges.
The other one is the 12% excise duty that telecom firms have for years lobbied the Government to reduce to match the regional average of 10%.
The electricity tariffs are not only high but the power grid extends to just about 5% of the entire country, which means the remote areas where telecom masts exist do not access electricity.
Javaid argued that in the circumstances, only shrewd investors who plan long-term will survive in a market that has increasingly been speculating mergers and acquisitions among the five players in order to stay afloat. Javaid allayed fears about Warid Telecom Uganda closing down shop.
"Smart firms look at the long-term costs to have a long-term business."

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