Mobile network operator Smart Telecom is planning to invest $300 million in the development of value added services for its subscribers across East Africa.
Smart Telecom, owned and operated by Industrial Promotion Services, a subsidiary of the Aga Khan Fund for Development, also plans to enter the Kenyan and Rwandan market soon, having set up operations in Uganda, Tanzania and Burundi early this year.
Abdellatif Bouziani, the firm’s group chief executive officer, said the firm will compete with well-established telecom firms such as MTN Uganda, Airtel and Vodacom.
“We are planning to invest more than $300 million in the next five years, based on the performance of the business. At the moment, the investment is not in infrastructure because that is already there. We need to invest in bringing in the latest technology, products and services, and platforms that are currently not available to customers,” Mr Bouziani said.
“We are talking about smart home, smart security, smart learning; these are the products that we want to bring into the market.”
Smart Telecom has leased thousands of towers from the British cellular tower specialist Eaton Towers and the American Tower Corporation.
Out of Uganda’s 17 million subscribers, MTN is the dominant player with 10 million subscribers, followed by Airtel Uganda with 7.5 million subscribers, and the rest shared between Uganda Telecom, Orange and now Smart Telecom.
Vodacom tops Tanzanian’s mobile phone subscriber numbers with 12.3 million, followed by Airtel Tanzania with 7.5 million subscribers, Tigo with 5.6 million; Zantel, Tanzania Telecommunication Company Ltd, Smart Telecom, Benson and Sasatel share the rest of the country’s 28 million subscribers, according to the Tanzania Communications Regulatory Authority.
Mr Bouziani said the firm plans to unveil numerous products ranging from monitoring homes through smart phones to having access to education abroad live on their computers as well as mobile money. He said mobile phone subscribers in the region have become more sophisticated, with a good number relying on social media, short messages, and video calls and less on voice calls and thus the need for more innovation.
“With our innovations, consumer centric, social enterprise model, leveraging all our presence, I think we will be able to survive, build reputation and partnership with our consumers in the market,” Mr Bouziani said, adding that the mobile firm is also offering free roaming for its subscribers in the region even as the East African Community member states plan to lower the cost of cross-border calls under the One-Network-Area next month.
Kenya, Uganda and Rwanda plans to roll out One Network Area under the Northern Corridor Infrastructure Integration Framework, which also includes non-EAC member South Sudan to enable subscribers in the region enjoy cheap cross-border calls.
The move by Smart Telecom to invest in inventing new products comes on the back of heightened competition in the telecom sector across the region; the scenario that has seen telecom firms register reduction in profits especially from voice calls and others folding their businesses.
In Uganda, for instance, Bharti Airtel, the parent company of Airtel Uganda signed a deal with Warid Telecom, the initially third largest mobile phone company in the country last year, adding 2.8 million customers to its network.
Also, Orange Uganda is said to be in talks with the Beirut-based Africell to acquire its business in Uganda and other African markets including Kenya, Democratic Republic of Congo and Niger where it does not hold the number one or two spot.
Similarly, Essar Capital Ltd, part of India’s Essar conglomerate, said in August this year that it had signed binding agreements with Bharti Airtel Ltd and Safaricom Ltd to sell its telecoms business in Kenya for about $120 million as the firm was making losses due to stiff competition.