One of the more quiet headlines of the week in Kampala is the launch of a new mobile service provider – the France Telecom owned Orange Telecom. Reactions are mixed but hopeful. Orange is the 5th major operator here, following South African owned MTN, Zain (pakistani-owned? Formerly known as Celtel), Uganda Telecom/Mango, and Warid (also foreign owned). Village Phone is a virtual network operator, using high gain antennas to extend MTN’s network to fixed locations in remote villages.
By far and away, MTN is the dominant operator. Zain/Celtel was the first to market, but as my Ugandan friends say “then they started cheating us, overcharging – we will not forget.” So when MTN arrived with giant masts, reliable infrastructure, and fair rates, the Ugandans switched en masse.
UTL is the government owned operator (they may be partially privatized, I would have to check), so they also carry the stigma of distrust of high prices, as well as perception of inadequate infrastructure. In my experience – their GPRS is great, EDGE is not so good, but their overall coverage is not as widespread as MTN or Zain.
Warid is a new arrival – as of about 2 years ago, and already they have a reputation for being an all-over network – that is what their billboards say (if you have time, browse my flickr photos from fall 2008). They don’t have huge market share yet but people say they will make gains. In the meantime, they are also entering the broadband market, offering low cost Internet services via a city-wide WiMax network at less than $100/month with minimal installation costs. Revolutionary in an area where VSAT is the norm.
Orange. Another provide means more competition. Will it force an existing provider out of business by driving prices lower? Will more money go into infrastructure rollout in rural areas?
Another extremely important aspect of telecommunications rollout in Uganda is the Uganda Communication Commission’s rural communications development fund, the RCDF. Using part of the income from the taxes on the voice communications, take bids from the mobile phone operators to fund projects to develop unreached rural areas that don’t have mobile coverage yet – and might not be a viable market normally. I think it is structured well here, with a good balance of investment in innovation and practical deployment. Orange has the potential to be another player here, if they are willing to participate in Uganda’s development, and not just trying to tap the mobile phone market. The two can be mutually beneficial. We shall see.
Zain is actually Kuwaiti owned!
(That’s were I work in Sudan)