Orange enters Uganda promising low tariff

The launch of the Orange mobile phone services and MTN’s mobile money transfer service have Uganda’s telecommunications market humming.

Orange, a subsidiary of France Telecom, commenced operations in Uganda last week as part of regional expansion programme that started with its launch in Kenya last year.

Its entry brings the number of mobile phone operators in the Ugandan market to five, with MTN Uganda, Zain, Uganda Telecom and Warid Telecom already commanding an estimated total subscriber base of 8.2 million as of the end of 2008.

MTN Uganda, the market leader, accounts for more than half the subscriber numbers.

Orange, with a presence in 15 countries, recently acquired a 53 per cent stake in Hits Telecom Uganda Ltd, a subsidiary of International Investment House based in Abu Dhabi.

Under the terms of the acquisition, Orange is to invest an estimated $100 million in rollout activities by 2011.

According to its chief executive officer, Phillippe Luxcey, Orange will go for the provision of a high quality network that is less prone to congestion, is reasonably priced to ensure high returns on investment and attract a critical mass of clients, both low and high income.

For instance, calls within the Orange network are to cost Ush8 ($0.004) per second and Ush310 ($0.16) per minute compared to Ush600 ($0.3) charged per minute on some rival networks.

The firm will offer mobile and Internet services before expanding to include data services.

Orange Uganda Ltd has also entered into a site sharing agreement with another new entrant, Warid Telecom, involving 300 masts.

The arrangement involves installation of Orange antennas on 150 Warid owned masts and installation of Warid antennas on an equivalent number of Orange masts. The sites are separated by 100 metres intervals.

Though the site sharing approach has failed to take root in Uganda’s telecommunications market, Orange expects in this way to realise significant savings in operational costs estimated at 30 per cent, as well as investment costs. Solar powered sites are also planned for rollout in the near future.

In the meantime, an estimated 100 sites within the Orange network, mainly in southern Uganda, are live, according to Luxcey.

MTN’s launch of its money transfer service in the same week is expected to ignite more interest in the lucrative cash transfer market.

MTN Mobile Money, the equivalent of Safaricom’s Mpesa service, is intended to boost MTN’s penetration of the vast unbanked population while increasing turnover through high volume transactions.

The service is to be conducted through 600 points of sale within MTN’s distribution network in partnership with Stanbic Bank’s 100 branches.

Users of MTN Mobile Money will need to acquire enabled SIM cards for the service before registering with an authorised agent.

The agent will send the recipient’s details to the partner bank — Stanbic.

The minimum transaction amount is Ush5,000 ($2.5) while the maximum is Ush1 million ($508).

The benefits of the service include sending cash, purchasing airtime, and paying household bills.

MTN Uganda’s chief executive Noel Meier said the Bank of Uganda is satisfied that adequate measures have been put in place to protect people’s money.