Smart decision? Seventh operator squeezes into Ugandan market

19 Mar 2014

Smart Telecom, backed by the Aga Khan Fund for Economic Development (AKFED), has launched commercial services in Uganda, becoming the nation’s seventh wireless provider. The newcomer aims to differentiate itself from its entrenched rivals by offering cheaper calls, providing better customer services and by supporting local communities. AKFED chose the ‘Smart’ brand through its ‘Give us a name’ campaign, which saw citizens across eastern Africa offer suggestions and vote on a moniker for the cellco. Smart now claims to be the cheapest provider in the market, charging customers on a per-call basis rather than per-minute or per-second billing. Commenting on the decision, Smart Telecom East Africa’s CEO Abdellatif Bouziani explained: ‘Like we asked East Africans to give us a name, we also asked them what they wanted from us, and they said they wanted to make calls without being under pressure of time.’ In a bid to tie-up its image, Smart has linked its numbering code ‘074’ to its prices, charging customers UGX74 (USD0.029) for each call. Although the cellco’s network is currently limited to Kampala, Smart plans to expand coverage into rural areas. Smart also plans to use a base in Uganda to launch operations in Tanzania and Burundi.

AKFED, which also holds a majority stake in Roshan, Afghanistan’s largest cellco by subscribers, acquired its licences through the acquisition of Sure Telecom. According to TeleGeography’s GlobalComms Database Cypriot-backed Sure Telecom received its concessions in July 2007 and planned to offset expectations of low profitability in the crowded mobile segment by investing in fixed line networks. More than a year behind schedule, Sure launched a trial GSM network in December 2012, but failed to make an impression on the market. Smart Telecom will share the market with MTN Uganda and Airtel Uganda, which represent a combined total of 77.3% of the sector, whilst Uganda Telecommunications Ltd (UTL),Orange Uganda, Smile Communications, i-Tel and mobile virtual network operator (MVNO) K2 make up the remainder. Despite the number of operators, however, there is plenty of room for growth with population penetration of only 56% at the end of 2013 and high levels of multiple SIM ownership.

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