Uganda: Essar Ready for Telecom Market Battle


Following the entry of the Essar Group into Uganda through the acquisition of Warid, Bharti Airtel joined the market by taking up Zain. Walter Wafula interviewed Sunil Colaso, the new Warid Telecom CEO about Essar's plan for Uganda.

Q: Who is Mr Sunil Colaso?

A: I hold a Masters Degree in Business Administration from Bajaj - one of the leading colleges in India. I have almost 20 years of work experience out of which 10 years have been in Bharti. I started my career in the hotel industry in sales and marketing and spent a lot of time in health care and financial companies like American Express but most of my experience has been in telecom. I also worked with Hutchison Max, what we call Vodafone Essar today. My last role was Chief Executive Officer of Bharti in one of the regions in Mumbai, India.

Q: Why are India's telecom giants; Essar and Bharti Airtel scrambling for Africa today?

A: If you look at statistics around the globe, most markets have become mature and one market on the high growth curve is Africa. It's really the opportunity that is here. We believe that the infrastructure is growing rapidly and is in place. Stability in the area is also good and now is the right time for us to build a good and valuable sustainable model for our shareholders and the country. Therefore the timing is ripe because this is the future not only for telecommunication companies but also infrastructure and various other businesses that will keep coming to Africa. Therefore, the timing is just good.

Q: How does Essar plan to get on top of the African market because Bharti is on top in India?

A: We have a 33 per cent stake in Vodafone India and in the markets where we are coming from; we are very close to Bharti. It's a neck and neck fight. We have over 15 years of experience just like Bharti. We welcome them into this market but I promise you, it's going to be a very exciting and competitive market. We have fought in India and we will do it here. But remember that the major market shareholder here is neither us nor Bharti/Zain. It is MTN. So we have a huge task ahead of us to compete with MTN. There's a long way to go, it's just the beginning.

Q: What are some of the experiences that Essar is likely to transfer to Warid Telecom?

A: Market development and growth is really what we can bring to this market. In a space of about 10 years, the Indian market has grown from nothing to 50 per cent market penetration of over a billion consumers. And I think that is one thing that we want here. We are investing a lot in our people through many training programmes and capability building because Essar is a global player and it can bring a multicultural experience to this market. Investing in upgrading the skills of our people in this market will help them to take up many leadership positions in future. We are going to spend a lot of time and money in helping to build leadership capability in our people. The second is sharing infrastructure and if we can do that, which will help us optimise costs. We believe that we should compete with others but at the back end, we should share infrastructure and that is where I believe we will bring in a lot of experience in this market. And third, is to go and deliver our scratch cards to areas as low as every parish, so that they also enjoy value added products.

Q: Do you see more room for telecom growth in this market?

A: While the penetration is at 30 per cent, you know that every customer has about two to three SIM cards, therefore the penetration is much lower effective and therefore the opportunity is much higher. So if the market is to grow and if we have to take the service to every parish and every county up country, then the customers will have to get more value to buy products like phones. Today, the phone is really urban, so what we are really doing is to try adding value.

Q: How do you deliver value to people in the rural areas?

A: Two things; one is the cost of entry of the handset and we have provided some affordable phones and then delivering value, which not only helps people in their leisure but also business. Value is not just priced but at the same time a service that is relevant and beneficial to customers.

Q: Other players have added mobile money services to their offerings. When does Warid plan to launch similar money transfer services?

A: We are doing everything possible to get that service into the market very quickly. I believe that is a big opportunity and that's a gap that we will exploit. I will come back to you when we are closer to the launch.

Q: Lastly, are you considering rebranding Warid Telecom?

AI will answer that at an appropriate time. But I cannot rule it out.

(Source: The Monitor)