Airtel-Warid deal is a game of data and mobile money
Deo Kaitezi, Daily Monitor
Bharti Airtel’s recent acquisition of Warid Uganda only gives us an inside sneak peak of how the flag posts in the telecom industry have been moved into data and Mobile Money services. The news of an all-cash deal that is believed to be in the region of $100 million points to the struggle of Telecom companies to upgrade their data services and both compete and collaborate favourably with banks and other possible players to offer cheaper and better Mobile wallet services.
Warid carried out massive promotions and campaigns for its brand to easily penetrate the Market having launched early 2008. The campaigns such as the popular Bang KB tipped the balance of call rates within the market that were then driven towards lower per second rates.
As market competition tightened, Warid aligned its self with the strategy to drive its volume business up, whilest positioning its self as the most affordable network. The telecom company associated itself with double sim phones with its affordable Warid to Warid rates. It brought in market double sim phones on promotion that hugely became popular with the youth and the low end business segment seeking friendlier communication ways.
The fast emergence of smart phone technology coupled with massive data upgrades from 2G to 3G+ bandwidth; has increasingly turned the mobile phone into a multi task machine. Reports in the Media have revealed how the telecoms have had to upgrade their satellite radios and cut on tower infrastructure management as operational greatly increased to live up to the demands of internet services. This meant that there were lower revenues per customer forcing the telecoms to take the initiative of upgrading their data services.
Meanwhile the regulator, Uganda Communications Commission has been seeking expansion network of rural coverage from telecoms and improvement in quality of services as dropped calls were experienced. Telecom companies decided to take caution by adopting efficient revenue management strategies.
The idea of tower sharing manifested itself last year with most telecom companies leasing off their assets. Eaton towers took over the assets of Warid and Orange telecom while MTN Uganda leased off more than 1000 towers American Tower Corporation. Bharti Airtel meanwhile continues to enjoy a formidable partnership with Nokia Siemens, which manages its assets.
The huge demand for data has meant massive upgrade of bandwidth services. The size of the bandwidth for the telecoms determines how many users can sign up to use the service. With huge number of subscribers, any addition beyond the allotted bandwidth is believed to create a need for additional bandwidth. According to a source from Huawei, “there has been massive upgrading by most of the major telecoms to boost their internet services.”
In a press statement on the acquisition, Warid Uganda board member Mohammed Nahayan is quoted saying that the deal would offer “wider network coverage, access to the most extensive 3G network and world class products and services.” Airtel recently revealed that having successfully established its 3G service in the Central region, it is extending the service to extensive rural areas of Uganda. MTN Uganda having recently launched 4GLTE service seems to foot ahead of Airtel in the data market.
Reports reveal that Airtel will retain the 070 code used by Warid customers, giving the impression that the Warid Market will be retained to offer a variety opportunities like in the Mobile wallet sector,a wise “chase move “if you asked me. Bharti Airtel has partnered with various banks both in African and the Asia pacific region plus various non-banking microfinance institutions offering a saving and payment services.
The partnerships have expanded the usage opportunities of Mobile Money service from payment of utility bills to bank products/services. Warid Pesa had taken a lip ahead of the Airtel Money with various partnerships most notably its partnership with Orient Bank, Equity Bank, and Uganda Revenue Authority for easier payment of taxes below UGX 3 million. (the kind of market paying taxes).
The company currently the world fourth largest telecom company by customers will be able to increase its customer base in Uganda by nearly 61 per cent to 7.4 million from the present 4.6 million. The deal gives Airtel leverage to compete with MTN in the Mobile Wallet industry.However, this will not mean an outright success as Airtel will have to seriously review its Market Strategy, study its work force and even raise the bar in as far as performance targets and productivity are concerned.
The Warid Market could hugely enhance Airtel Money footprints and make it competitive over other players in the mobile money market. Bharti Airtel having previously gained strong foothold on the African telecom market with its $10.7 billion acquisition of Zain Telecom will hope to grip on the local market that has attracted some of the biggest investments in data and Mobile Money. Thus confirming that the “Warid- Airtel deal a Strategic game of data and Mobile Money”.
