Orange Rides On Internet, Data Services in Uganda

Digital Content

Internet and data services are the new forces behind Orange's penetration into the Ugandan market. This informs the firm's strategy as it strives for market dominance amid raging price competition.

MTN Uganda boasts of the largest subscriber base estimated at 5.6 million, an achievement anchored on a low pricing penetration strategy, wide network coverage and attractive user services like MTN Mobile Money transfer.

Zain Uganda comes second with more than two million subscribers after a turnaround strategy driven by sharp discounts on calling rates and improved network quality.UTL has registered about two million subscribers on the back of sharp price discounts. Its favourite packages include UTL Jazz and UTL Extra that provides one of the lowest off net calling rates in the market. Calls under the latter profile are charged at Ush320($0.15) for the first and second minutes while the rest are charged Ush270 ($0.12) each.

Orange's approach is driven by its 3G network that boasts high Internet connectivity speeds backed by solid fibre optic links, minimal interruptions and relatively cheap offers. Its bandwidth for instance, goes for Ush0.9 per KB, the lowest charge in the local market.

Experts also argue that the use of dedicated bandwith packages that are strictly allocated to individual users as opposed to shared bandwidth packages offered elsewhere has strongly boosted growth in the Internet and data services segment.

According to the chief executive Phillipe Luxcey, the firm has recorded a remarkable growth with its highly discounted local and international calling tariffs in the midst of widespread discounts by bigger players. "Our focus is on a multimedia service that offers high quality voice calls, fast Internet speeds and information services," said Mr Luxcey.

Orange Uganda commenced operations in March becoming the country's fifth mobile operator after Zain Uganda, MTN, Uganda Telecom Ltd (UTL) and Warid Telecom. Orange's minimum Internet access offer comes with a modem priced at $102 for 1 GB capacity with a monthly fee of $25. Prior to Orange's entry, many consumers complained of low connectivity speeds and high user fees.

In contrast, Orange's low-priced, high speed Internet packages have attracted several users keen on downloading heavy pictures, videos and playing music for long intervals. So far, Orange has registered 10,000 mobile Internet subscribers since the product launch and boasts of total installed capacity of 600MB that can be doubled.

In addition, fibre capacity has been increased six-fold to accommodate customer growth but only 20 percent of international Internet capacity has been utilised, with the rest being sold to local Internet service providers, according to Luxcey.

But analysts believe Orange Internet's biggest undoing lies in limited network coverage though it boasts 450 live sites spread across the country. Orange has managed to get only 500,000 out of available nine million subscribers in the voice segment. This is partly due to its lucrative local and international calling tariffs and quality voice reception. Currently, it charges as little as Ush200 ($0.09) for on net calls.