Senegal – As competition starts, enter the new service providers

Top Story

In Senegal, everybody in the telecommunication and Internet sectors is focused on the outcome of the tender process for a third telecommunication licence. This new operator will at last give Orange (Sonatel) a run for its money and introduce some much needed competition. Isabelle Gross reports from Dakar on the steady growth of one of the country’s new service providers whose time has come.

Two weeks ago, the Senegalese regulator ART launched a call for tenders for a global operator licence and speculation about the name of the winner has increased as the deadline for the bids is August 31st. The results will by announced by September 15th or even earlier. According to the regulator, the bids received so far are up to the country’s financial expectations but it didn’t want to disclose company names and number of applications. Both Vivendi-owned Maroc Telecom and Celtel have been mentioned as bidders.

With the launch of a third telecommunications operator, Senegal is further opening its telephony market which has already begun to see a new generation of service providers start to flourish. Senegalese, Tabou Communications was founded in 1999 and started by selling mobile phones and accessories. It was only in 2004 that it ventured into developing value added services and content targeted at mobile phone users.

It uses a voice platform supplied by a Russian equipment manufacturer which also maintains it. In the meantime, it has signed access agreements with Sonatel’s mobile arm, Orange and Tigo (ex-Sentel), the second mobile operator in Senegal which currently gives it access to 3 million mobile numbers across the country. Both companies supply Tabou Communications with short access numbers for their SMS marketing campaigns.

Among Tabou’s other customers are local radio stations. It supplies them with an access number which enables the radio station to broadcast special messages for songs or to organises games. It also offers its mobile marketing services to local businesses keen to promote their products and services. It recently organised a mobile marketing campaign for a reseller of European cars which provided them with a car (either free or at a heavily discounted price) that was the first prize for an SMS game advertised across the country.

These SMS access number are premium numbers that cost on average 250 CFA francs (US$0.50) a call. According to Cheikh Ahmed Gueye, Tabou Communications’s CEO they can receive between 100,000 and 300,000 SMS messages per campaign. This represents between 25 and 75 million CFA francs (US$50,000 and US$150,000) revenue per campaign.

For each SMS charged at the premium rate of 250 CFA francs, the mobile operators retains 20-25 CFA francs for the transmission. The remaining amount which represents about 90% of the retail charge is shared between Tabou Communications and its marketing partners.

Beside setting up SMS campaigns, Tabou Communications also offers ringtones using songs from local singers. The ringtones are either directly sent to the users mobile phone or they can download them from their website. Senegal is famous for its lively musical scene and has established its reputation worldwide through singers like Youssoun N’dour, Omar Pène and Thione Seck.

Senegalese mobile users are keen to get ringtones reproducing their famous singers song. Among the main Senegalese companies selling ring tones there are 2s Mobile, Mobile pro Africa, Africa Sonnerie, Telipro and Tabou Communications. All was going well until a couple of weeks ago, when Youssou N’dour’s production company Jololi started a legal action regarding the payment of copyright fees (royalties fees) associated to the download of ringtone based on Senegalese songs.

Ring tones companies are allowed to offer downloads as long as they pay the 12% royalties fees to the Bureau Senegalais des droits d’auteurs (BSDA). The dispute gets a bit more complicated because Jololi argues that this only applies to monophonic or polyphonic ring tones that reproduces the tune of the song. However, it claims that when the voice of singer is included in the ringtone then the download companies have to sign a direct agreement with the music production company. This would give Youssou Ndour’s production company a massive share of the ringtone and mobile video clips download business in Senegal.

Today the case is still pending but it hasn’t stopped Tabou Communications looking beyond the borders of Senegal. This week’s the company’s CEO, Cheikh Ahmed Gueye has signed an access agreement with Orange Mali (ex-Ikatel), Mali’s second mobile operator and the first in terms of subscribers. Soon Malian mobile subscribers will be able to vote for their favorite singers via SMS or find out when sending a short message if their partners’ forenames are a match for a 100% successful life together!

Senegalese Companies like Tabou Communications or Groupe Chaka specialise are the new service providers in the market and will grow as there is a more competitive market. They specialise in voice applications, business outsourcing and money transfer service and are spreading their wings outside of Senegal. Neighbouring countries like Mali, Burkina-Faso, Côte d’Ivoire, Guinéa are hosting some of their subsidiaries where they are bringing the dynamic, entrepreneurial Senegalese spirit.