Airtel Enters Rwanda Market

Indian telecoms group Bharti Airtel has announced it has secured a licence to provide 2G and 3G cellular services in Rwanda, The New Times reports. 

The company plans to invest over USD100 million over the next three years, including USD30 million for the purchase of the operating licence. 

It aims to bring ‘affordable services and innovative products’ to the market, and plans to expand its wireless broadband network to all major towns across the country.

 In June 2010 Bharti Airtel acquired the African assets of Kuwait’s Zain Group, in a deal valued at USD10.7 billion. The company took over Zain’s operations in 15 countries, including Malawi, Burkina Faso, Ghana, Kenya, Nigeria, Sierra Leone and Uganda.

Bharti will join two other mobile operators in the market: South Africa-based MTN Rwanda, which had a total of 2.794 million mobile subscribers at the end of June 2011; and Millicom Rwanda (Tigo), which is majority-owned by Luxembourg-based Millicom International Cellular and had a subscriber base of over 812,000 at the same date. A third operator, Rwandatel, had its mobile licence revoked in April 2011, after the company failed to meet licence obligations, such as coverage, quality of service and planned investment targets. Rwandatel is 80% owned by Libyan government investment vehicle LAP Green Networks, although telecoms regulator RURA said the decision to cancel its mobile licence had nothing to do with enforcing a United Nations (UN) resolution to impose sanctions on Libya, including the freezing of its assets, following unrest in the North African nation.

Airtel Uganda Increases Tariffs Amid Rising Inflation

Airtel yesterday became the second communications company in Uganda to up call tariffs with new rates starting Monday next week.

The increase has been occasioned by the higher costs of doing business in Uganda, according to Mr V.G. Somasekhar, the managing director of Airtel Uganda.

Customers will pay Shs4 per second, an increase from Shs3 per second or Shs240 per minute instead of Shs180 per minute.

The new rates will apply to all calls on the Airtel network and other networks, according to a statement from the company.

“The telecom business is trapped in a cycle of rising business costs, which is significantly threatening the level of service delivery in the industry,” Mr Somasekhar said yesterday. “The upward adjustment in tariffs will ensure the company continues to meet its operational costs and maintain its unequalled level of service delivery in the market.”

Airtel’s announcement came just a day after MTN Uganda doubled its calling tariffs from Shs2 per second to Shs4 per second, also citing the increasing cost of doing business.

The economy is struggling with the depreciating Shilling, the rising cost of fuel and persistent power blackouts.  This week, inflation hit a record 20% mark.

Airtel Could Launch 4G Earlier Than Planned

Bharti Airtel Ltd., a leading global telecommunications company with operations in 19 countries across Asia and Africa, may launch 4G technology for mobiles in India sooner than expected. 

Sources claim that Sanjay Kapoor, CEO, India and South Asia, Bharti Airtel, believes that the launch of 4G services in India will happen in close vicinity with the launch in other countries. 

4G is expected to take the mobile industry by storm, with every network operator eyeing it as a means of acquiring more customers and increasing their market share.

Airtel is a dominant player in the Indian telecom market with around 170 million subscribers. 

Reportedly Mr. Kapoor has mentioned the low penetration of 3G devices as an obstacle for mobile operators providing 3G services.  He further adds that the language of the content used in the country is not very conducive.

Airtel To Terminate UTL Calls

Airtel Uganda has announced that starting 5th September 2011 its subscribers will not be able to receive calls from or make calls to Uganda Telecom (UTL) lines.

In a statement published on Wednesday Airtel states that the decision follows the expiry on 15th August 2011 of the interconnection agreement between itself and UTL.

Earlier reports had indicated that UTL owes Airtel over 8 billion shillings in interconnection fees.

UTL has been battling a court case in which MTN Uganda is demanding over 20 billion Uganda shillings. Last week a court in Kampala ruled in favour of MTN but UTL has appealed against the decision .

69% of UTL is owned by the Libyan government through its investment vehicle, Libyan Africa Portfolio (LAP), with the remaining 31% owned by the Ugandan government.

UN sanctions in March required the freezing of Libya’s assets for the duration of its on-going civil war, but in order to prevent the loss of jobs, the Ugandan government took over complete control of the company.

Early this year Uganda’s Media Owners Association reportedly ceased any advertising for UTL, citing unpaid fees of 3 billion Uganda shillings.

Airtel Kenya Launches Quiz Cash Give Away

Airtel Kenya has launched a promotion that will see one customer win KES 100,000 daily for 90 days.

Under the name Airtel Cashmania, customers can answer questions and be entered into a daily draw for a chance to win the cash prize.

For every correct answer a customer sends, the customer will receive 20 chances or more. For every incorrect answer the customer will receive 10 chances.

To participate in the promotion customers need to send a SMS with their first name to the short code 888. Every SMS is charged at KES 25.

A similar competition was launched by Airtel Uganda last month dub be "Kyaba Too Good!

Airtel Connects Western Zambia

Mobile network operator Airtel Zambia has reportedly started rolling out infrastructure in the more remote parts of Zambia’s Western Province, as it looks to fend off competition and maintain its market share. 


Airtel Zambia managing director Fayaz King was quoted as saying that  contractors are already at work on extending the cellco’s coverage with a view to attracting increased numbers of rural subscribers. 


‘We are now going in areas like Mutomena, Lukena, Liuwa, Libonda Palace and Mishulundu in Western Zambia. Some of these areas can only be accessed by water. This is our commitment to addressing Zambia’s telecommunications needs,’ the executive noted.


 Further, Mr King said that the network expansion formed part of an initiative that his company had undertaken over the previous ten months aimed at bringing services to some of the country’s most rural regions. 


According to the report Airtel has connected 88 isolated rural areas and communities in Zambia as part of the project, in provinces including Luapula, Northern, North-Western, Eastern, Southern and Central as well as in some rural parts of the Copperbelt like Lufwanyama, Masaiti, and Mpongwe districts.

Uganda Takes Over Libyan-Owned UTL

The Ugandan government has taken over management of troubled Libyan-owned telecommunications company, Uganda Telecom Ltd. (UTL), Uganda's minister of information and communications technology said Tuesday.

As a regulator and a minority shareholder in Uganda Telcom, the government has decided to take over management of the company to safeguard its interests and the interests of its customers, Aggrey Awori said in a telephone interview with Dow Jones Newswires.

"We cannot sit and watch as things get out of hand," he said.

The Libyan Arab Portfolio, or LAP Green Network, holds a controlling stake in Uganda Telecom.

According to Awori, the move is part of government's decision to implement the United Nations-initiated sanctions against Libya. Last week, the Ugandan central bank took over Libya-owned Tropical African Bank.

Uganda Telecom has been struggling to meet payment obligations to other Ugandan telecom companies arising from interconnection fees. A company spokesman couldn't return calls seeking comment immediately.

Earlier this month, MTN Uganda--a unit of Johannesburg-listed MTN Group Ltd. threatened to block calls to Uganda Telecom over a 20 billion Ugandan shillings ($8.3 million) unpaid interconnection fees that have accumulated over a three-year period.

Airtel Uganda Ltd. also claims that Uganda Telecom owes it UGX8 billion in interconnection fees and had also threatened to terminate calls to the network. Airtel Uganda Ltd. is a unit of India-based Bharti Airtel Ltd.

However, government has prevailed upon the two companies from blocking calls to Uganda Telecom, to avoid inconveniencing the public. People familiar with the situation say that the two companies were now planning to attach some of the properties belonging to Uganda Telecom.

Attachment is a legal process by which a court of law, at the request of a creditor, designates specific property owned by the debtor to be transferred to the creditor, or sold for the benefit of the creditor.

Uganda's foreign affairs minister announced last week that government would freeze Libyan assets worth $375 million; other Libyan-owned companies that have been affected by the sanctions include Tamoil East Africa, National & Housing Construction Company, Laico Lake Victoria Hotel and Libya Oil. 

-Dow Jones Newswires

Airtel Zambia Minority Shareholders to Sue Over Delisting

Indian mobile giant Bharti Airtel’s bid to delist its Zambian subsidiary from the Lusaka bourse looks set to face further setbacks following reports that minority shareholders are now suing the company.

According to Reuters, the remaining minority shareholders, which account for around 3% of the total stock of Airtel Zambia, have filed an affidavit stating that they refuse to sell their holdings as they are unhappy with both the terms and price of sale proposed by Bharti.

‘The failure to comply with the Companies Act renders the subsequent acquisition notice impotent and without validity,’ the court document said. One sticking point is understood to be that Bharti has not disclosed the price at which it bought the bulk of its shares in the Zambian cellco, making it difficult for minority stockholders to decide on the matter.

MTN To Cut Links With Uganda Telecom Over Three-Year Debt

A three year dispute over inter-connectivity fees has culminated in MTN Uganda announcing that it is severing interconnectivity with its industry rival Uganda Telecom (UTL), the Daily Monitor reports.

“MTN customers will therefore be unable to place direct calls to UTL subscribers, and vice-versa,” MTN said in a notice on Wednesday. “This action has been necessitated by UTL continuously defaulting on the settlement of its interconnect payments, amounting to about Shs20 billion accumulated over a period of three years,” the statement added.


In an earlier separate interview, UTL company Secretary Donald Nyakairu said the company was in the process of settling MTN’s dues. This, however, seems not to have materialised.

The stand-off comes after a row between the two companies, stemming from 2006 over the unpaid interconnectivity fees ended in UTL failing to pay MTN. UTL has also been in dispute with Warid Telecom and Airtel Uganda over unpaid interconnectivity fees all totalling to over Shs12 billion.

The Uganda Communications Commission (UCC) is also demanding Shs9 billion in unpaid yearly fees from UTL although its Interim Executive Director Godfrey Mutabazi declined to elaborate on the matter.  “Interconnectivity issues are between telecom subscribers,” Mr Mutabazi said yesterday. “We only encouraged dialogue but we do not interfere.” Yesterday, MTN said UTL had unjustifiably and persistently refused to honour their business obligation and attempts to resolve the matter failed.

MTN last year took UTL to court and secured an order to pay the money in dispute.  Court documents obtained by the Daily Monitor indicated that between November 2008 and 2009, MTN demanded Shs7 billion in outstanding interconnectivity fees.

In February 2008, it issued UTL with another invoice demanding another payment of Shs6 billion, also for interconnection fees for March 2007 to December 2007.  UTL paid Shs3 billion but said it would not pay the balance of Shs3 billion which it said was not as a result of domestic traffic which attracts interconnectivity fees but was international traffic with Sudan.

In 2006, Ms GEMTEL a telecom operator in South Sudan requested Uganda to facilitate its calling code. On May 10, 2006, Works Minister John Nasasira wrote to UTL approving a request to extend its network coverage to South Sudan. UTL notified Gemtel that it will grant it usage of code +256 477.  +256 is the official Uganda country code.

On June 22, 2006 UTL informed MTN that it had set up interconnection with GEMTEL adding that it had been assigned +256477 which is a Ugandan calling code. MTN says this is the source of the accumulated fees.

Bharti To Take Full Control of Airtel Zambia

Having confirmed last month that it would reapply to delist its Zambian subsidiary after its initial attempt was rejected, India’s Bharti Airtel has contacted all of Airtel Zambia’s remaining minority shareholders to inform them of its intentions to forcibly acquire the stake in the cellco it does not currently hold. 


According to All Africa, Bharti has sent a letter to those minority shareholders which declined to sell their shares after it launched a mandatory offer in November 2010, with the communication advising the 2,000 or so remaining stakeholders that Bharti had now met all conditions set in the Companies Act which allow it to press forward with acquiring the holding.


‘Since the conditions have been met Airtel is now proceeding to issue this acquisition notice to the minority shareholders within the two-month period specified in Section 237(2) of the Companies Act,’ noted the letter. Bharti will pay ZMK710 (USD0.15) per share, the same price that it offered back in November last year.

Seychelles Gets EUR8 Million For Its International Sub-Marine Cable

The European Investment Bank (EIB) has provided a EUR8 million (USD11 million) loan to the Seychelles Cable Systems Company (SCS) for the installation and operation of the island nation’s first international submarine fibre-optic cable.


The planned 1,930km cable will link the main island of Mahe to the existing Eastern Africa Submarine System (EASSy) in Tanzania, and is expected to be operational by the second half of 2012, according to a report on Afriquejet.com. 


The project will also benefit from a EUR4 million grant from the EU-Africa Infrastructure Trust Fund to support shareholding in the project by the Seychelles government. A statutory dividend from this equity stake will be used to provide free internet access for schools, libraries, hospitals and other social development-related services. 


The EUR27 million overall project cost will be financed through 40% equity and 60% debt, the EIB said. Long-term debt will be co-financed equally by the EIB and the African Development Bank, and equity contributions split between three shareholders – the Government of Seychelles, Cable and Wireless Seychelles and Airtel. 


SCS executive Benjamin Choppy – who is also permanent secretary for ICT in the Seychelles – signed the deal with the EIB, which he called a key milestone for the project, and stressed that the cable will dramatically improve voice telephony and internet access in the Seychelles, with international transmission capacity predicted to be seven times cheaper than current prices.


The EIB previously supported the EASSy project to connect 20 coastal and landlocked countries in East and Southern Africa using a high bandwidth undersea fibre-optic cable and terrestrial links.

Airtel To Increase Its Zambian Stake to 97%

India’s Bharti Airtel is expected to increase its stake in its Zambian listed subsidiary from 79% to 97% following the conclusion of a mandatory offer to buy out minority shareholders, launched in November.

Bharti first acquired a stake in Airtel Zambia when it purchased the assets of Kuwait’s Zain earlier this year. Under local rules, companies are usually delisted if a single shareholder owns more than a 95% stak

Airtel Rebrands Warid In Bangladesh

Indian giant Bharti Airtel has announced the launch of its Airtel brand in Bangladesh to replace the Warid Bangladesh name that its operations in the country currently operate under.

Bharti bought a 70% stake in the Bangladeshi cellco in January 2010 for USD300 million from UAE-based Abu Dhabi Group. Chris Tobit, CEO of Airtel Bangladesh, said the company would strive to improve services, whilst it would also ‘value the country's identity, culture and language ... while retaining the youthfulness and dynamism of the global brand so that our customers here can enjoy the same best-in-class brand experience as across continents.’

He added: ‘We have already begun to bring alive our promise of taking our mobile network deeper and delivering world-class and affordable mobile services ... Airtel customers will get to enjoy price advantage over competitive offers, which are brought on by Airtel's unique business model.’

Airtel Bangladesh customers will now be able to experience new multimedia content with the launch of ‘Airtel live’, a WAP portal offering games, video, pictures and various other value added services. With approximately four million customers, Airtel Bangladesh is the country's fourth largest operator after Telenor-backed GrameenPhone, Orascom-owned Banglalink and Robi (owned by Malaysia’s Axiata).

Bharti and Vodafone Struggle to Make Money In Africa

For Vodafone Group Plc, Bharti Airtel Ltd. and other phone companies with about $90 billion invested in Africa, making more money from each user in the world’s fastest-growing market is becoming the biggest challenge.

The number of operators is prompting a race to the bottom on call rates. In Tanzania, which has seven phone companies, prices have fallen 90 percent over the past 18 months. Companies also face among the world’s highest “churn” rates, with users frequently changing operators, and patchy infrastructure, all of which make returns on investment difficult.

“It is hard,” said Pieter Uys, chief executive officer of Vodacom Group Ltd., which is controlled by Vodafone and is the largest provider of mobile-phone services in South Africa and Tanzania. “You have to do business in a very different way, you have to build data networks, find other ways to grow revenue.”

Phone operators gathered at Africa’s telecommunications conference that began yesterday in Cape Town want to sell services to the 50 percent of the market that doesn’t have mobile phones. They also want to service current customers more cheaply, without losing user loyalty, while stemming declines in average revenue per user, or ARPU, by offering newer services such as mobile Internet, banking and other money transactions.

“We are now dealing with an ecosystem that’s changing very, very fast,” Andile Ngacaba, chairman of Dimension Data and Convergence Partners, said at the conference. “On the one side, we see this subscriber growth and growth in data and data applications. On the other side, we see this decrease in ARPUs. This requires new models of investment such as infrastructure sharing.”

African Growth

Operators have been lured to the continent by its promise. Africa has a mobile-phone population of about 445 million handsets, according to a McKinsey & Co. report. It took 20 years for the size of the mobile-phone population to reach 200 million, and less than three years to get to the next 200 million, according to the report.

Africa has “become the fastest-growing region in the global cellular market, going from fewer than 2 million mobile phones in 1998 to more than 400 million today,” it said.

The mobile value-added services market in Africa was worth $4.5 billion in 2009, and over the next five years is forecast to grow at a compound annual growth rate of 20 percent, generating $11.5 billion by 2014, Informa Telecoms & Media, a London-based consultant, said in its Rural Connectivity Report in Africa published this month.

Capture Opportunity

About 80 percent of the sales were from messaging, while mobile Internet contributed 14 percent and mobile entertainment such as music and television 3.5 percent, the report showed.

Internet and broadband penetration is still in single digits, Uys said.

“So the possibilities are still there but it’s what you pay for it to get it, the investment in infrastructure,” he said. “If the tariffs are driven too low for whatever reason then it might also not make sense.”

In order for mobile operators to “capture this opportunity,” the market needs consolidation, McKinsey said. “The industry structure should be rationalized, for example, because many markets, even smaller ones, have four or more players.”

Competition on the continent is fiercer now than it has ever been. In the Democratic Republic of Congo and Tanzania, mobile-phone tariffs plunged between 50 percent and 60 percent in the six months through September.

Tumbling Prices

Prices in Kenya have been slashed to such an extent that Safaricom Ltd. Chief Executive Officer Bob Collymore said India’s Bharti, which bought most of Zain’s African operations last year for $9 billion, is losing money on as much as 50 percent of its voice traffic.

Safaricom has an 86 percent share of the market and is 40 percent held by Newbury, England-based Vodafone. Bharti’s head of African operations, Manoj Kohli, declined to comment on Safaricom’s remarks. “We can’t comment on our competitors’ claims,” Kohli said.

On Aug. 18, Bharti halved tariffs in Kenya to 3 shillings, Les Baillie, a spokesman for Safaricom said. Safaricom “knew that voice was always going to become a commodity,” Baillie said. “It was not expected that it would happen so rapidly though.”

Companies are scrambling to adapt their operations to the new climate.

“We have to review our business model and make it leaner and compete on price and have more quality in our network and to have more data,” said Mickael Ghossein, chief executive officer of Orange Telkom Kenya, which is 51 percent held by France Telecom SA. “We have to enhance our quality of networks.”

Sharing Towers

In South Africa, Vodacom, which is 65 percent owned by Vodafone, is investing in data networks. Data now accounts for more than 50 percent of its traffic and is growing at more than 50 percent a year, Uys said.

The company is also pushing smart devices that are able to browse the Internet to low-end segments with touchscreen phones that retail at 499 rand ($73). Once users have an improved mobile-browsing experience, data consumption increases, Uys said

Operators are also sharing infrastructure, especially to reach sparsely populated rural areas where returns on capital invested in infrastructure are low.

Infrastructure sharing and outsourcing of towers has been punted for years. Now, faced with greater competitive pressure, companies are beginning to act.

‘Good Industry’

Last month, Vodafone signed an agreement with Eaton Towers to manage its 750 towers in Ghana. On Nov. 5, American Tower Corp. agreed to buy 3,200 towers from Cell C Ltd., South Africa’s third-largest mobile phone services provider, in a deal worth $430 million.

“We are going to see more and more of those type of deals happening,” said David Lerche, a telecoms analyst at Johannesburg-based Avior Research. “There are lots of little tower companies running around trying to position themselves as tower outsourcers. It’s quite an interesting development.”

For all its challenges, the market is still attractive, Marc Rennard, vice president of Orange Mobile for Africa, Middle East and Asia, said in an interview.

While investor interest has waned a little, “we are profitable, the big players, the five, six main players are profitable,” he said. “It’s still a good industry.”

-Bloomberg

Safaricom Plans to Increase Maximum Cash Transfer

CONVERGED communication solutions provider Safaricom has announced plans to increase its deposits in its M-Pesa services, with the aim of enabling its customers to transact larger amounts of money.

The operator plans to increase the maximum amount that a subscriber can transact in a day to
US$ 650, up from the current US$450.

Outgoing Safaricom Chief Executive officer Michael Joseph said the company intends to split M-Pesa into two arms, one for customer-to-customer (C2C) transactions, and the other for customer-to-business (C2B) transactions.

Joseph said the company forwarded the proposed upgrade of its M-Pesa money transfer service facility to the Kenyan Central Bank (CBK), and would commence implementing it as soon as CBK okayed the changes.

He said they had realised that some of the transactions require customers to transfer larger amounts than the current limit of US$450. Safaricom also plans to upgrade the service to link it with the Internet, a move that is expected to enable customers to make M-Pesa transactions online. Currently, transactions are only made through mobile handsets.

Joseph said Safaricom would strive to remain a market leader in the data segment, with M-Pesa remaining its most formidable weapon.

“M-Pesa has become more than just a marketing tool for us in providing services to our subscribers conveniently,” he said.

Close to 300 companies have partnered with Safaricom to settle bills via M-Pesa. Joseph revealed that they were in talks with the CBK for permission to increase the money transfer limits on M-Pesa, which is currently capped at Sh35 000 per transaction.

“We want to take the maximum amount you can transact to Sh50 000 (US$650) and also lower the minimum amount, but all that is subject to CBK approval,” he said without giving a clear timeline on when that would happen.

Adoption of mobile banking has been taking root in the country to speed up access to financial services and reach the un-banked population.

“We are moving close to €150 million (Sh16.5 billion) a day; that’s an incredible amount of money. We are moving more money in a month than what Western Union does,” he said.

Joseph said the mobile market is gearing for a major battle in the control of the customer numbers.
“It is not really a price war; it’s a total war, which Safaricom intends to win not by an inch, or a foot but by a long mile,” Joseph said.

Safaricom’s dominance in the mobile industry has come under pressure by the entrance of Bharti Airtel, Zain Africa’s new shareholders, who have made it clear they are out to attain leadership in the next three to four years.

Competitors Follow Warid as Price War Rages In Uganda

Graphic: New Vision

ZAIN, MTN and Uganda Telecom yesterday announced a reduction in call rates as the tariff war took a new front in Uganda, one of Africa’s fiercest telecom markets.  Last week, Warid drew first blood by dropping call rates to sh5 per second across all networks.  The move by Warid set the stage for a furious price war as the telecom firms tried to outpace each other.

On Tuesday, MTN and UTL declared lower call rates between sh4 to sh5. But Zain quickly outmaneuvered the three by announcing sh3 per second to all networks, including Zain to Zain. It now means that Zain is the cheapest operator, charging sh180 (USD0.082) per minute to all networks. The offer applies to both prepaid and postpaid customers.

Zain
Levi Nyakundi, the Zain marketing manager for usage and retention, said the drop was permanent.  “It is a 66% price drop on the most popular tariff plan - Zain Flexi - which has been sh9 on-net and sh11 off-network,” said Nyakundi.

It was expected that Zain, bought by India's Bharti Airtel, would adopt a drastic pricing model largely on heavily discounted call charges, as happened in Kenya about two months ago, where calls are as cheap as sh81 (Ksh3).

 Uganda Telecom
Uganda Telecom had also turned the barrels to the other operators, announcing a rate of sh4 for calls from UTL to UTL and sh5 for calls to other networks.  According to a statement from UTL’s chief marketing officer, Mohamadou Konkobo, UTL customers will now spend a maximum of sh240 to make a call within the network and a maximum of sh300 to call other networks.

MTN
On its part, MTN announced a “celebration promotion” at sh3 per second on the per-second billing tariff plan and sh160 for calls within the MTN Yellowmax tariff plan. Isaac Nsereko, the MTN chief marketing officer, explained that clients on the per-minute plan will pay sh320 per minute for the first 10 minutes of the day. For the rest of the day, calls will cost sh160 within the MTN network.

On the MTN per-second tariff plan, customers will pay sh6 for the first five minutes, then sh3 per second for the rest of the day within the MTN network. Calls from MTN to other networks remain at sh6 per second all day, which remains one of the highest in the market.

Warid  Telecom
Warid CEO Madhur Taneja, whose firm sparked off the price war last week, said he was pleased that other telecoms were responding to the price reduction. “Reducing call rates is the way to go and the consumers will get value for their money and I hope that every player in the market does so,” he said. Officials from the other mobile telephone companies; Orange, Smile and i-Telecom were not available for comment yesterday.

The current price war is seen as a result of growing competition in the market as well as industry regulator Uganda Communications Commission’s recent reduction of the ceiling of interconnection fees from Shs180 to Shs130 per minute where firms fail to agree bilaterally.

Espionage
It has been a feverish seven days in which telecoms have spied on each other for tariff structures booked with advertising agencies and letters to the regulator, Uganda Communications Commission (UCC), with cancellation after cancellation before final tariff plans were agreed upon.

MTN boasts of about 50% of the market share. It means there are still more calls from MTN to MTN. But the telecom giant now faces stiff competition on voice that will be compounded when Bharti adapts its Asian model, where it has over 100 million subscribers.

In a letter to the UCC dated September 28, 2010, the MTN chief executive officer, Themba Khumalo, said the network had introduced the tariff to celebrate its 12 years of existence in Uganda.   “During these 12 years, we have been at the forefront of making telecommunications affordable and accessible,” Khumalo wrote.  The new MTN tariffs have been launched under the umbrella campaign labelled ‘Yarriba’.

The UCC public relations officer, Isaac Kalembe, said the development is good for the industry.  [Personally] I think we are moving in the right direction because it is the wish of UCC that the rates are reduced,” said Kalembe.

Analysts also believe this plays into the hands of the consumer who has been paying an exorbitant price compared to other regional markets, largely because of the high interconnection fees.

There has not been a response yet from Orange Uganda.  Orange is the most recent entrant to the country's mobile telecom market.

Zain Kenya Rebrands As Bharti Airtel on October 15

Zain Kenya will commence its re-branding exercise on 15 October, taking up the identity of its new owner, Indian telecom giant Bharti Airtel.

Zain has said that unlike previous re-branding exercises, when its predecessors entered the market using expensive above-the-line (ATL) strategies, Bharti Airtel will adopt corporate social responsibility (CSR) as its entry strategy, prioritising community empowerment as a key part of its branding drive. Zain has reportedly enlisted the assistance of vendors and street traders in rural markets to increase brand awareness.

A Zain Kenya official commented: ‘This is the first time a telecoms firm will be launching in the country with less activity recorded in the above-the-line strategies and more emphasis on ground activities.’ The shift to Bharti Airtel marks the fourth time that Zain Kenya has changed its brand name during its ten year operating history.

The operator entered the Kenyan wireless market as Kencell in 2000, before changing to Celtel Kenya in 2004 and Zain Kenya in 2008. As at June 2010 Zain Kenya reported 1.89 million subscribers, giving it a 9.4% market share.

Bharti's Bid For Zain Zambia Rejected By Bourse Regulator

Zambia’s Securities and Exchange Commission (SEC) has rejected Indian operator Bharti Airtel’s latest bid for the publicly listed stake of its majority-owned mobile subsidiary Zain Zambia, The Post reports.

According to the local newspaper, the SEC turned down a bid by Bharti Airtel of ZMK710 (USD0.144) per share for the 22% stake, with the offer refused on the basis that it was too far below market estimations.

This is the second time that Bharti has had an offer for the stake rejected; last month it put forward a ZMK675 per share proposal. It is believed that most commissioners at the SEC believe that the lowest acceptable price for Bharti to proceed with a mandatory offer would be ZWK1,126 per share.

Warid Tariff Cuts Could Open Price War in Uganda

The mobile telephone industry in Uganda appears headed for a new price war after Warid Telecom announced it was slashing the cost of its cross-network calls to Shs5 (USD 0.023) per second.


Warid Uganda CEO Madhur Taneja said yesterday that the new rate, which is half of what the company charged previously, was aimed at reducing the cost of telephone calls.

“High mobile cross-network tariffs have been a barrier to mobile users but we want to break that obstacle by offering the lowest rate in the market,” he said.

The industry average for cross-network calls, which means calls made from one network to another, is around Shs10 per second or Shs300 (USD 0.13) per minute and Warid’s new price, which the firm says is permanent and makes it the cheapest in the market, is likely to draw a response from other players.

Rival firms were non-committal about what kind of response would be forthcoming. Isaac Nsereko, the chief marketing officer of market-leader MTN Uganda, told Daily Monitor  newspaper in a telephone interview that the Shs5 tariff was not a “big deal” and that MTN charges as low as Shs4.5 per second for calls within its network on its discount promotion and Shs5.5 per second to other networks.

Competitors
Ms Cesear Mloka, the marketing director of the second-largest player Zain Uganda/Bharti Airtel, declined to comment when contacted.

However, Zain today introduced a bonus offer where prepaid subcribers earn bonus credit equivalent to 50% of credit recharge.  The bonus can be used only for calls to another Zain line.

Zain Kenya recently led a price war in that market that was followed by a swift cutting of call rates to as low as Uganda Shs75 per minute across all networks. The uniform call rate in Rwanda is about Uganda Shs270 per minute while in Tanzania it’s about Uganda Shs7.5 per second.


The local telecoms industry has already been rocked by the slashing of call rates within networks with different firms charging a flat fee of between Shs1,500 – Shs2,000 for 24 hours of unlimited calls.

Dual phone craze
The higher cross-network call charges have, however, forced many subscribers to buy more than one sim-card to allow them call cheaply within one network and then swap cards when they need to call other networks. It has also boosted the sale of dual sim-card phone handsets.

Warid, Orange and Uganda Telecom are currently offering new subcribers phones whith dual-sim capability.

Uganda Communications Commission, the industry regulator, recently announced a reduction in the ceiling of interconnection fees from Shs180 to Shs130 per minute where firms fail to agree bilaterally.

The industry has also seen a dramatic fall in data prices following the landing of undersea cables on the East African coastline which brought broadband internet, but the competition here has mainly been between MTN and Orange Telecom.

--Daily Monitor

Zain Introduces Low Price Vouchers As Price war rages On

After reducing its calling rate by 50% just a fortnight ago, Zain Kenya, the second largest mobile telephony operator in Kenya, has introduced Sh5 and Sh10 denomination airtime vouchers to the market.


Zain Kenya Managing Director Rene Meza said the move was aimed at complementing its recent 50% reduction on call charges.

“We are offering a wide range of scratch card denominations to suit the needs of all individuals. Access to telecommunication services is no longer a luxury but an integral part of each Kenyan’s socio-economic needs,” said Meza.

Meza said the lowering of tariffs was only the first ace up Zain’s sleeve, adding that the operator would be able to match any move its competitors made.

The Kenyan mobile telephony industry is currently experiencing cutthroat competition, with networks introducing various incentives to lure customers.

According to the Communications Commission of Kenya’s latest statistics, Zain was closing in on the two million-subscriber mark.

Zain becomes the second operator to introduce the Sh5 and Sh10 vouchers after Safaricom made a similar move in November 2009.

“We would like to enable our subscribers to enjoy our new low calling rates without hindrance. The low denomination scratch cards that we have introduced onto the market underpin our continued commitment to make access to telecommunication services in Kenya more affordable,” he said.

Meza said Zain Kenya would continue enriching the customer experience through providing affordable and flexible services in line with changing market needs.

“We are very happy with the way the Kenyan market has received our new approach to business. We are confident that we will be able to reclaim a significant portion of the market share as we pursue our goal of attaining market leadership,” he said.

He revealed that Zain had embarked on an upgrading programme for its infrastructure to cope with growing call traffic.

Last month Bharti Airtel announced that it had released Sh24 billion in capital investment into the Kenyan operation following acquisition of the company.