Uganda: Essar’s Warid Telecom Cuts Call Charges by Half

Telecoms

According to figures from Uganda Communications Commission (UCC) for August 2010, Zain has an equal call rate of sh300 for calls from Zain to other networks between 8:00pm and midnight.

Orange has one of the lowest calls within its network at just sh290 all day but charges a fixed sh320 for calls from Orange to all the other networks all day.

Warid chief executive officer Madhur Taneja said the 50% slash from the previous sh10 is a move to break the barrier, which had proved to be expensive to mobile users in Uganda.

"We are going to show our determination to bring down the prices and we are convinced that affordability is the way to go," said Taneja. The announcement effectively sparks off the tariff wars again in a sector that had opted for innovative products that wooed customers but with little overall change on the call rates.

UCC figures also indicate that standards profile peak time calls from MTN to other networks are highest at sh500 followed UTL at sh440, while calls to MTN is one of the lowest between 8:00pm to midnight at just sh285. Zain charges the highest off peak at sh300 for calls within the same network.

"It is true, mobile users have been facing a higher tariff for connecting and this makes talking among networks expensive, effectively building barriers to communicate," said Taneja.

On the implication for this tariff structure for the industry, Zain Uganda country boss Yesse Oenga was reluctant to comment. "It is good for the customer but it is their promotion, I comment for Zain," said Yesse.

MTN chief marketing officer Isaac Nsereko's said the customer still gets more value from MTN Zone, a percentage tariff structure that was launched over two years ago.
"Their tariff offnetwork is slightly better than ours but the customer still gets more value with MTN," said Nsereko.

While there are currently seven players in the market, there are five key dominant players with MTN as the market leader. The others are Zain, Orange, UTL, Warid, I-Telecom and Smile Telecom.

The presence of the seven players has not had a significant impact on the tariffs structure with analysts attributing this to the high interconnection rate that stands at sh131. Interconnection fee is the amount an operator pays another for routing traffic through their networks. The high interconnection rate means customers have to pay more for calls to other networks. Kenya recently slashed its interconnection rate by half and is targeting to drop it further to about sh28.