Vodacom Targeting Angola, Uganda, Ethiopia

South Africa-based mobile group Vodacom has confirmed that it is ready to expand its operational footprint across Africa, and is on the hunt for small-scale acquisitions. Vodacom, which is majority owned by the UK’s Vodafone Group, currently operates in five countries in sub-Saharan Africa, and chief executive Pieter Uys told Dow Jones Newswires that the company is looking to make a series of acquisitions in the USD100 million range.

Uys noted that Vodacom will focus on countries that offer a stable political environment, have densely populated cities and offer room for growth. As such, the CEO pinpointed Angola, Ethiopia and Uganda as likely targets. Announcing its FY11 results earlier this week, Vodacom noted that the financial year ended March was the first time that its operations outside South Africa have contributed positive cash flow. As a result, Uys told Dow Jones: ‘We feel more comfortable that we have the recipe to be successful outside South Africa’.


In March 2012 Sifiso Dabengwa, CEO of Vodacom’s chief rival MTN Group confirmed that his company was interested in lining up so-called ‘bolt-on’ deals in new African markets, once again naming Angola and Ethiopia. In the former, a third mobile licence has been expected for some time, with state-run incumbent Angola Telecom keen to secure an international partner to assist with its entrance to the sector. Meanwhile, Ethiopia is one of the few countries in Africa still operating a monopoly in the wireless sector, with state-run Ethio Telecom the sole licensee.

Elsewhere, Uganda is overcrowded by comparison, boasting six active wireless operators, with another, Sure Telecom Uganda, waiting in the wings. Of the country’s cellcos, Uganda Telecom Ltd and Warid Telecom Uganda are plausible targets, with the ownership of both companies coming under scrutiny in recent years.

Essar Denies It Is Selling Off Yu

Indian conglomerate the Essar Group has denied international media reports suggesting that it is looking to sell off its 70% stake in Kenyan mobile operator Essar Telecom Kenya (ETK), which operates under the ‘Yu’ brand.

The Essar Group hit back at the claims – which originated with India’s Economic Times earlier this week – commenting: ‘Essar remains committed to the African market and is satisfied with its operations in Kenya. It is not evaluating any sell off options’.

The original report coincided with the Essar Group’s admission that it has pulled out of a long-standing agreement to acquire telecoms assets in Uganda and the Republic of Congo. An unnamed source, with knowledge of the matter, suggested that the Indian firm no longer viewed telecoms as a core strategic interest.

Speculation was rife that South African telecoms giant MTN – a company with a long-held interest in securing a foothold the Kenyan wireless sector – was interested in buying out ETK. MTN is now believed to have distanced itself from the rumours.

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.

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).

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.

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

Uganda Gets New Mobile User's Watchdog

A new body has been set up to protect the interests of mobile phone users in Uganda.

A report from AllAfrica.com says that the Mobile Telephone Watchdog will help guard consumers against bad practice by the country’s cellular operators.

Uganda’s wireless sector was home to more than 4.4 million subscribers at the end of June 2010.  MTN Uganda controls around 46% of the market, with Zain Uganda claiming around 19%, and Uganda Telecom and Warid Telecom accounting for approximately 16% each. The remaining 3% is split between Orange Uganda and I-Tel.

Late Comer Orange Uses Internet To Penetrate Ugandan Market

Internet and data services are the new forces behind Orange’s penetration into the Ugandan market.  This informs the firm’s strategy as it strives for market dominance amid raging price competition.

MTN Uganda boasts of the largest subscriber base estimated at 5.6 million, an achievement anchored on a low pricing penetration strategy, wide network coverage and attractive user services like MTN Mobile Money transfer.  Zain Uganda comes second with more than two million subscribers after a turnaround strategy driven by sharp discounts on calling rates and improved network quality.  UTL has registered about two million subscribers on the back of sharp price discounts. Its favourite packages include UTL Jazz and UTL Extra that provides one of the lowest off net calling rates in the market.

Calls under the latter profile are charged at Ush320($0.15) for the first and second minutes while the rest are charged Ush270 ($0.12) each.

Orange’s approach is driven by its 3G network that boasts high Internet connectivity speeds backed by solid fibre optic links, minimal interruptions and relatively cheap offers. Its bandwidth for instance, goes for Ush0.9 per KB, the lowest charge in the local market.

Experts also argue that the use of dedicated bandwith packages that are strictly allocated to individual users as opposed to shared bandwidth packages offered elsewhere has strongly boosted growth in the Internet and data services segment.

According to the chief executive Phillipe Luxcey, the firm has recorded a remarkable growth with its highly discounted local and international calling tariffs in the midst of widespread discounts by bigger players.  “Our focus is on a multimedia service that offers high quality voice calls, fast Internet speeds and information services,” said Mr Luxcey.

Orange Uganda commenced operations in March becoming the country’s fifth mobile operator after Zain Uganda, MTN, Uganda Telecom Ltd (UTL) and Warid Telecom.  Orange’s minimum Internet access offer comes with a modem priced at $102 for 1 GB capacity with a monthly fee of $25. Prior to Orange’s entry, many consumers complained of low connectivity speeds and high user fees.

In contrast, Orange’s low-priced, high speed Internet packages have attracted several users keen on downloading heavy pictures, videos and playing music for long intervals.  So far, Orange has registered 10,000 mobile Internet subscribers since the product launch and boasts of total installed capacity of 600MB that can be doubled.

In addition, fibre capacity has been increased sixfold to accommodate customer growth but only 20 percent of international Internet capacity has been utilised, with the rest being sold to local Internet service providers, according to Mr Luxcey.

But analysts believe Orange Internet’s biggest undoing lies in limited network coverage though it boasts 450 live sites spread across the country.  Orange has managed to get only 500,000 out of available nine million subscribers in the voice segment. This is partly due to its lucrative local and international calling tariffs and quality voice reception. Currently, it charges as little as Ush200 ($0.09) for on net calls.

-The EastAfrican

Warid Acquistion Won't Affect Bharti Ratings

­Fitch Ratings has commented that Bharti Airtel's acquisition of a 70% stake in Bangladesh's Warid Telecom will not have an impact on the former's ratings. Fitch has a Long-term Issuer Default Rating of 'BBB-' with a Stable Outlook on Bharti, and notes that the incremental capex and Warid's existing debt will not materially impact Bharti's credit profile. However, the agency is currently monitoring the negative impact on Bharti's revenues stemming from irrational pricing activity by the operators in India during October-December 2009, and the pending cost of 3G pan-India license fees and its impact on Bharti's credit profile; details of India's 3G auction is expected to be announced sometime in 4QFY10.

Under the agreement with Warid, the acquisition will be partly funded by the purchase of existing shares held in Warid by the Dhabi group for a nominal consideration and the balance by way of an issuance of fresh shares at par. The acquisition will give Bharti the management and board control of the company. Bharti will make a fresh investment of USD300m to expand the network coverage and capacity of Warid in Bangladesh. Although, Bharti has yet to confirm the period over which such capex would be made, Fitch expects the same to occur over a period of 2-3 years. Fitch does not expect the incremental capex to significantly change Bharti's capex plans. Further, Fitch notes that the maximum existing debt on Warid's balance sheet is USD300m, and accordingly the same is unlikely to materially impact Fitch's forecasted net leverage expectations for Bharti.

According to the Bangladesh Telecommunication Regulatory Commission (BRTC), Warid is the fourth-largest telecom operator in Bangladesh, with 2.92 million subscribers and a 5.8% subscriber market share at end-November 2009. It offers mobile services in all 64 districts of the country. At end-November 2009, the total subscriber base in Bangladesh was 50.55 million, with a penetration of 31.6%.

Bharti is one of India's leading private sector telecommunications providers, with integrated and diversified operations across mobile, fixed-line access, consumer broadband, direct-to-home television, long-distance and enterprise services. At end-November 2009, Bharti had a subscriber market share of 22.9% and a revenue market share of 33%. Bharti's FY09 reported revenues, EBITDAR and net income were INR373.5bn, INR170.6bn and INR78.6bn, respectively.

Smiles Launches as Uganda's Seventh Phone Operator

Smiles Communications Uganda has launched its WiMAX network in the capital city of Kampala, with plans to cover the entire country by the end of next year.

'We bring to the Ugandan market a WiMAX platform that uses voice over internet protocol (VoIP) to make calls, the first of its kind on the African continent,' the company's CEO, Mr. Philip said.

Mr. Phillip said the firm would begin with wireless table phones that would be located in public places including markets, taxis and bus parks. 'We are informed of how the competitors operate and we are going for the bottom of the pyramid business,' he told the Daily Monitor.

The other operators in Uganda are MTN, Orange Uganda, Uganda Telecom, Warid Telecom, Zain and the recently launched I-Telecom.

MTN Uganda Gets US$100 m for Network Expansion

MTN Uganda has raised US$100 million in debt to fund the expansion of its network. Isaac Nsereko, chief marketing officer at MTN confirmed the development to the Reuters news agency.

Absa Capital, the investment banking arm of Absa Group was lead arranger of the  syndicated loan.

"We are using it to invest in the network, different sections of the network really," he told Reuters in a telephone interview.

Based on data from the Mobile World, the country's five current operators and their market shares are: MTN (41%); Zain (22%); Uganda Telecom (19%); Warid Telecom (17%) and Orange (2%). A sixth network, I-Tel launched its network last month.

Warid Uganda In Tax Dispute

THE Commercial Court in Kampala has stopped the Uganda Revenue Authority (URA) from collecting over sh160m and enforcing other tax collections from Warid Telecoms, pending the final determination of its main suit.

This followed an application by the lawyers representing Warid Telecoms. The telecom company is disputing URA's orders to Stanbic Bank to pay sh160,918,869 in taxes.

Justice Geoffrey Kiryabwire of the Commercial Court also ordered the parties to carry out a reconciliation exercise to determine if any taxes were due and payable to the URA and report back to him on August 26.

Warid also sued the URA's Commissioner of Customs for wrongly taxing its duty-free machinery. The firm also asked the court to compel URA to refund with interest a total of sh172,389,883, which it claimed the tax body forcefully paid itself from the company's general purposes bank account.

Warid was referred to as one of the largest investors in Uganda having invested over $200m (over sh400b) in foreign direct investments.

The company further seeks general and punitive or exemplary damages for what it described as URA's illegal and wanton acts that are damaging its operations.

The company told Justice Kiryabwire that the Commissioner of Customs willfully and unlawfully imposed tax on palisade fencing that is part of its telecommunications plant and machinery, which is exempt from import duty.

Warid also asked the court to permanently stop URA from enforcing the "third party agency notice" that requires its bankers to pay taxes on its (Warid's) plant and machinery or any other enforcement measures against it.

The court was told that between September and October 2007, the finance ministry, granted investment incentives to Warid that its plant and machinery was to be imported free of any duty under the investment incentives by the ministry and the East African Customs Union Common External Tariff.

The court heard that the Commissioner of Customs had accepted a list of WARID items to be imported.

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."

Orange Begins Uganda Operations

Orange has launched mobile telecommunications services in Uganda. The company said its GSM network will be further expanded, not only in terms of coverage but also in terms of services and technologies. 3G broadband services will also be offered in the next few months, following the planned upgrade of the network.

With this launch, Uganda becomes the 15th African country in Orange's international footprint and joins a worldwide community of 123 million Orange customers. Uganda has a mobile penetration rate of less than 27 percent, and four other mobile network operators are already active in the country.

The launch of operations by Orange Uganda follows the acquisition by France Telecom of a 53 percent stake in Hits Telecom Uganda in October 2008. Orange's service offering in Uganda includes a unique national flat rate per second or per minute, a range of international tariffs and an exclusive call-back service. Orange Customer Service will be available from a toll-free hotline 24/7 to answer any queries, provide information or give technical assistance. Orange will use the 079 number prefix and charge UGX 8 per second for on-net calls and UGX 310 per minute to other local networks.

Orange Uganda director Abu Mukasa said SMS to local networks and Orange Kenya will cost UGX 90 and UGX 220 for other international destinations. Orange has signed an agreement with Warid Telecom to share 300 sites. Under the arrangement, the company will build 150 sites and share Warid's 150 sites already in place. 

Safaricom Roaming Clients In Uganda Irked By SMS Charges

Although, it is the most profitable company, and also boasts the cheapest local rates in East Africa, Safaricom’s subscribers in Uganda are complaining about the newly introduced exorbitant calling and short message (sms) rates in Uganda.

Previously, the subscribers, most of whom are Kenyans, were being charged Kshs8 (Shs192) per minute on Ongea Tariff, and relatively the same charges on other tariffs like the belated Jibambie.

This has been increased by over 200 pc. The rates now stand at between Kshs25 (Shs600) to Kshs28 (Shs672) per minute and Ksh10 (Shs240) for a text message.

“Safaricom is charging us expensively,” remarked Scola Kamau, a Kenyan student in Uganda.
This is affecting Safaricom’s subscriber base in Uganda as it is losing out most of them to Zain and MTN.

When contacted to explain the phenomenon, a Safaricom customer care personnel claimed the tariffs for Safaricom subscribers who go out of Kenyan borders will not be the same as was the case.

The roaming service is similar to the boarderless service that was pioneered by the Zain group.  In Uganda, Safaricom offers the service through MTN Uganda and Uganda Telecom.

The exorbitant taxation system in Kenya could be one of the reasons for the hike in tariffs that will mostly hurt subscribers outside of Kenya.

Currently, the Value Added Tax is as high as 26 per cent and it could be more, hurting investors, even though they rake in millions of shillings in profits each year.

However, what explains the new charges is a technical hitch the telecommunications Company experienced in late January this year.

For about two days, it was glee for Safaricom subscribers in Uganda whenever they would top up their accounts with MTN credit cards. A top up of Shs500 (approximately Kshs20) would recharge the subscriber’s account to Kshs2000 (more than Shs48,000).

Taking advantage of the technical hitch, some people would top up to as much as Kshs200,000 (approximately Shs48,000) and transfer as much as they wanted,” said Innocent Masaki, who works as a customer care agent with Zain-Uganda.

He personally topped up more than Kshs150,000 (approximately Shs3.6 million) though he wouldn’t transfer more than Kshs10,000 (about Shs240,000) per day. However, the lucrative loophole was short lived as all sim cards were blocked but activated with a credit-less account.

“Safaricom must have made losses and they want to re-coup the money they lost during the technical error,” says one subscriber.

“We are all paying for the sins of a few people.”
“I have money but I fear to top up,” said Wycliff Mugun. He added, “Safaricom is for receiving only.”

And, indeed, Safaricom might also pay for the exodus of a few of its subscriber base to its local competitor or to its Ugandan counterparts MTN, Zain, Warid and Uganda Telecom.

2008 AfricaCom Awards Take Place

The 2008 AfricaCom Awards took place in Cape Town recently with Warid Telecom Uganda and Kenya's Safaricom taking two awards each.  Zain Africa also took two awards for its pan-African operations.

The AfricaCom Awards are a unique celebration of the outstanding achievements of the African telecommunications market. They recognise the achievements and success within the African communications market during the last twelve months.

At hand to witness the awards were top business leaders from all major telecom operations in Africa including guest host François Pienaar who captained and played flanker for the South African Springboks national rugby union team from June 1993 until August 1996. 

The inaugural AfricaCom Awards were the highlight of Informa Telecoms & Media convention held in Cape Town, South Africa at the Cape Town International Convention Centre. The event brought together a total of 3,500 attendees from 72 countries, a record 221 operator companies who have been attending the convention organized by Informa Telecoms & Media a leading provider of business intelligence and strategic marketing solutions to the global telecoms and media markets.

The Winners

The Winners for the different categories are as follows:

New Entrant of the Year: Warid Telecom Uganda

For this Award, judges were looking for an operator or service provider that developed a unique business model to offer new services in a region. Judges looked at both the company's network deployment strategy and effective branding and marketing campaign for the launch of its services. The entrant had to have shown outstanding results following its launch, in terms of customer uptake, revenues and growth prospects.

Best Network Quality Initiative of the Year: Cell C

The initiative had to have achieved extensive coverage (or improvement of coverage) of population and geographical area, with a particular attention to how it used cost-effective solutions to improve quality of service. The provider had to show measurable results that demonstrated significant improvement of services to end-users.

Most Innovative New Service of the Year: Ericsson

The entity had to demonstrate new thinking in the concept and provision of a service. The service should have answered a real need for customers in the market concerned, which has been been echoed in outstanding and measurable uptake following the launch.

Best Solution for Rural Services: Safaricom

The initiative should have beeen specifically targeted to under-served rural areas, with characteristics that are different from other network initiatives and deployment solutions. The provider had to demonstrate a long term impact on the rural communities involved.

Best Marketing Campaign of the Year: Zain

For this award judges looked for a stand-out campaign that significantly raised awareness of the brand or product or its profile. The application had to highlight the campaign's creativity in terms of concept, design and delivery, and a measurable impact on consumer's perception of the brand or product.

Best Customer Services Provider of the Year: Warid Telecom Uganda

Nominees had to show an innovative use of technology to improve customer relations and further develop the services provided.  It had to demonstrate how the initiative helped the company differentiate from its competitors and improve its business. This had to be endorsed with testimonials from customers.

Best Enterprise Solution in Africa: Wana Enterprises

The Award recognised a product or service that it tailored to the specific needs of enterprises based in African markets. The provider had to demonstrate innovation in terms of technology solutions used to deliver effective results, with proven benefits to customers.

Best Pan-African Initiative: Zain

This award was for an outstanding initiative developed across a sub-region of Africa or across the continent. It had to show specific benefits for the markets, organisations or consumers involved.  The initiative had to demonstrate innovation in terms of cross-country partnerships, management structure and sharing of best practice and skills.

Changing Lives Award: Safaricom

This Award was open to operators and service providers, not-for-profit organisation or telecoms solutions vendors who have implemented a project that has delivered a social or economic improvement to a community or region.  It could be: a Corporate Social Responsibility campaign, a new business initiative, a charitable or environmental project. The application had to show a measurable impact on the community or region involved, and the model should had to be able to be reproduced in other communities or regions.