Smile will launch VoLTE networks in three Africa countries and promises revolutionary voice pricing
Last Smile announced that it had raised US$365 million in debt and equity financing. This moved it from being a small ISP with an interesting story doing LTE into a different place. This week Russell Southwood caught up with CEO and founder Irene Charnley about what Smile’s planning to do with the money.
Smile has gone through several versions including using WiMAX when it was seen as the coming technology but has seemed to hit its stride with implementing broadband mobile in three countries (Nigeria, Tanzania and Uganda) using LTE.
Although Charnley has worked for MTN, the sheer slog of raising these funds should not be underestimated:”Having to raise funds as a small operator has been hard to do. It has taken three years…We switched to LTE a long time before other operators and have been recognized for making this move early.”
At a headline level, Smile will build out its LTE data networks to match the national 3G networks of other operators in its three countries and build a new broadband network in DRC:”We’re in four cities in Nigeria and we’ll expand that presence. We’re also filling in the gaps”. So far, extremely interesting but not remarkable. The kicker is in the second part of the announcement.
These will be VoLTE networks offering both voice and data by the end of the year and what Charnley describes as “clear voice”. In a week in which President Buhari complained about the voice quality of operators in Nigeria this may yet become a compelling proposition. Last Monday they reached agreement with Samsung to provide LTE enabled handsets capable of running the VoLTE service and “ we are currently doing testing with other handset manufacturers.”
“I’m back to being a mobile operator…We’re no more an ISP, we’re a full telco. We have a POP, a full MPLS network and an expanded backhaul service. As a full telco, we’ll be addressing consumers, B2B and corporates.”
“It’s an opportunity for the customer to have broadband plus voice. The demand for greater broadband increases daily with new services like VoD.” She sees this new generation of handsets able to do VoLTE driving broadband sales:”Clear voice will be absolutely clear on a Smile to Smile customer basis.”
The phone itself can be a mi-fi device and is then capable of driving a number of other devices wherever there is coverage. She describes the handsets as “cheap but not the cheapest.” Plus they have a new standalone mi-fi device that’s so small it can fit in a shirt pocket. It’s also possible to switch voice calling in hotspots to Wi-Fi, something that if your handset is also a Mi-Fi device, you will carry with you.
But Smile’s pricing has always seemed to be at the premium end of the market, something Charnley says is no longer the case:”Current pricing in all markets is comparable with 3G pricing even though our service is far better.”
Up until this point, Smile like many other small challengers has been remarkably coy about user numbers. Charnley tells me they have 100,000 subscribers, of which the largest part are in Nigeria. She is reluctant to make public projections but says “it will grow fairly quickly.”
Have the larger numbers led to a decline in network quality for the user?:”We have maintained the quality. Ask anybody who uses us in any of our markets. We want to be the broadband provider of choice.” When the service started, average weekly use per user was 12 GB. This has come down to 7.7-8 GB but it’s started to increase again:”It’s all down to the fact that it’s very reliable and easy to use.”
Compared to mobile operators, these numbers are tiny but that is perhaps to miss the point. Smile only needs to make a relatively small dent in other operators’ numbers to have a business. Its network has been designed for LTE and can take advantage of the cost savings from the ground up.
So the final crunch question is will the voice service be charged in minutes or as a data product?:’ I want to keep that a surprise for you. It will be very revolutionary but very good and it will be operational before the end of the year.”
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