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Competition in telecoms sector set to stiffen as Airtel acquires Warid
Airtel Uganda and MTN could be neck and neck in subscriber numbers following the signing of an agreement to acquire Warid Telecoms Ugandan business operations.
Warid, which entered the Ugandan telecommunications market five years ago, has been the countrys third largest player after MTN which was the leading player and Airtel in the second position. MTN claims to have 7.7 million subscribers as at December last year and claims a 51 per cent market share while Airtel says it will have 7.4 million after adding Warids 2.8 million customers.
The development which is still subject to regulatory and statutory approvals will now require the two companies sharpen their operational strategies in order to claim a solid market leadership position within Ugandas telecom market.
The telecommunication companies said in a media statement yesterday that the development is expected to strengthen Airtels presence in the country and consolidate its position in the market.
Airtel entered the Ugandan market in 2009 after buying Zain Africa operations, resulting into a rebrand in 2010.
Mr Michael Okwiri, the vice president in-charge of corporate communications at Airtel Africa, told this newspaper that Warid customers will retain the 070 numbers even after the transaction is completed. He, however, declined to comment on the details about the transaction costs and the fate of employees, saying that it was still early days and that further details and operational plans would be laid out in due course.
Warid Telecom will be remembered for igniting a price war in the industry in the last quarter of 2010 as competition for customer numbers and market share heat up.
This resulted in a huge drop in call rates for both within and off-network for all the five major network service providers, a development that was welcomed by mobile phone subscribers. Players slashed voice tariffs from a market average of Shs380 per minute to Shs180 per minute, and later to Shs1 per second for on-network calls at the beginning of 2011.
Players such as MTN criticized price wars saying they are distortionary, unsustainable and unhealthy to the industry and the economy as they result in low tax revenues. The Uganda Revenue Authority reported a Shs89.1 billion shortfall in its Shs2.9 trillion domestic revenue collections target in the 2010/11 financial year, partly due to price wars in the telecommunications sector which dented revenue collections.
Warids creativity
The telecom deployed an aggressive model that included a number of promotions such as Pakalast and corporate mega bonus which attracted its new customers. It was also rumoured that Warid was facing financial problems although this newspaper could not verify whether it was the cause of the sale.
The development puts to an end to long running speculations regarding the telecom com companys takeover. In 2011, it was rumoured that Orange was in talks with Warid for a possible takeover and early this year, the story changed to South Africas giant Vodacom PTY.
Mr Manoj Kohli, the managing director and chief executive of ****** Airtel, said the market consolidation, which is also the first in-market acquisition in the telecoms history, offers them great synergies by bringing together two fine telecom companies. He added that the development will translate to a healthier telecom sector in the country.
Competition in telecoms sector set to stiffen as Airtel acquires Warid - National - monitor.co.ug
Airtel Uganda and MTN could be neck and neck in subscriber numbers following the signing of an agreement to acquire Warid Telecoms Ugandan business operations.
Warid, which entered the Ugandan telecommunications market five years ago, has been the countrys third largest player after MTN which was the leading player and Airtel in the second position. MTN claims to have 7.7 million subscribers as at December last year and claims a 51 per cent market share while Airtel says it will have 7.4 million after adding Warids 2.8 million customers.
The development which is still subject to regulatory and statutory approvals will now require the two companies sharpen their operational strategies in order to claim a solid market leadership position within Ugandas telecom market.
The telecommunication companies said in a media statement yesterday that the development is expected to strengthen Airtels presence in the country and consolidate its position in the market.
Airtel entered the Ugandan market in 2009 after buying Zain Africa operations, resulting into a rebrand in 2010.
Mr Michael Okwiri, the vice president in-charge of corporate communications at Airtel Africa, told this newspaper that Warid customers will retain the 070 numbers even after the transaction is completed. He, however, declined to comment on the details about the transaction costs and the fate of employees, saying that it was still early days and that further details and operational plans would be laid out in due course.
Warid Telecom will be remembered for igniting a price war in the industry in the last quarter of 2010 as competition for customer numbers and market share heat up.
This resulted in a huge drop in call rates for both within and off-network for all the five major network service providers, a development that was welcomed by mobile phone subscribers. Players slashed voice tariffs from a market average of Shs380 per minute to Shs180 per minute, and later to Shs1 per second for on-network calls at the beginning of 2011.
Players such as MTN criticized price wars saying they are distortionary, unsustainable and unhealthy to the industry and the economy as they result in low tax revenues. The Uganda Revenue Authority reported a Shs89.1 billion shortfall in its Shs2.9 trillion domestic revenue collections target in the 2010/11 financial year, partly due to price wars in the telecommunications sector which dented revenue collections.
Warids creativity
The telecom deployed an aggressive model that included a number of promotions such as Pakalast and corporate mega bonus which attracted its new customers. It was also rumoured that Warid was facing financial problems although this newspaper could not verify whether it was the cause of the sale.
The development puts to an end to long running speculations regarding the telecom com companys takeover. In 2011, it was rumoured that Orange was in talks with Warid for a possible takeover and early this year, the story changed to South Africas giant Vodacom PTY.
Mr Manoj Kohli, the managing director and chief executive of ****** Airtel, said the market consolidation, which is also the first in-market acquisition in the telecoms history, offers them great synergies by bringing together two fine telecom companies. He added that the development will translate to a healthier telecom sector in the country.
Competition in telecoms sector set to stiffen as Airtel acquires Warid - National - monitor.co.ug
