Warid eyes second spot

February marked the first-year anniversary of the commercial launch of GSM services by Warid Telecom in Uganda. It has been a strong opening period, with the operator having added around 1.4 million subscribers in the period. Buoyed by such a positive market reaction to its service and offers, Warid aims to become a strong number two player in the next 18 months, having launched as the country’s fourth player

Warid Telecom’s success in adding more than 200,000 subscribers a month in its first year of operation brought it the Africa Com New Entrant Award

Uganda’s telecoms market is a bruising place, with the Uganda Competition Commission’s universal licensing scheme, launched in 2006, now in full flight. Four mobile operators offer service, with Warid Telecom Uganda being the last to enter the market, in February 2008. However, from the outset, the operator has made it clear that just because it launched fourth does not mean it has to remain in that position over time.

“Our philosophy right from the beginning has been differentiation on the basis of services, customer care, and superior network quality,” comments Tushar Maheshwari, Warid Telecom Uganda’s chief commercial officer. “One of the things that clearly differentiate us is the kind of network quality our subscribers enjoy. At the end of the day a customer purchases a mobile device to make calls, so the quality of voice is obviously very important.”

In a market containing strong African telecoms brands such as MTN and Zain, it was important for Warid Telecom, a relative unknown force on the continent, to create and develop its own identity, distinct to those of the incumbents. This determination to place customers at the centre of its proposition paid off handsomely as the operator ended up crossing the one million customer milestone within its first nine months of commercial operation.

The operator was originally awarded its unified licence in March 2007 and commercially launched the service 11 months later, launching in 30 districts across Uganda. The operator soon expanded coverage to 40 districts and now offers services in all major towns/cities across Uganda, providing seamless coverage on all major highways.

“We have always focussed on the level of customer service we are providing. One simple example of this is if a customer cannot come to us, we will go to them,” explains Maheshwari. “So we have something called ‘Warid on Wheels’, which is a van that travels to the more remote reaches of Uganda and is equipped with Internet connectivity, and allows us to resolve customer issues, if there are any, and to sell recharge cards.”

The development of the operator’s distribution channel has been a crucial element in the development of its marketing mix and the operator has developed a comprehensive franchising model, which currently extends to 32 franchisees nationwide. The operator offers training of all franchisee staff and insists on a consistent user experience within all outlets. Warid Telecom also operates an additional four flagship, company-owned shops.

Chief commercial officer Maheshwari believes Warid Telecom is reaping the benefits of an active differentiation ethos, centred on the customer

Warid’s target audience comprises small and medium-sized enterprises, rural consumers, youth, and businessmen/traders. In order to continue reinforcing its presence in the market the operator has offered innovative yet simple services and bundles from inception. Warid offered two tariff plans with five friends and family numbers, for example.

Promotions such as “Bang KB” where a customer can talk for two minutes (on-network) and the rest of the call is free and “Megabonus”, where a customer can receive additional on-network calls at no additional charge for 24 hours after recharging, were introduced.

Warid also launched various new services on its IVR platform, including musicon- demand, and Gamezone.

“We launched music-ondemand at an attractive price point, which was not based on per-minute pricing, and allows subscribers to listen to music as much as they want at a fixed fee,” comments Maheshwari. “Then we launched voice chat, which was another first in this market. During Ramadan we launched a service where subscribers were able to listen to scriptures from the Koran. These are the types of offerings we have rolled out that differentiate us from competitors.”

Gamezone is an IVR-based number game where customers can win a cash jackpot by entering the correct five digit number combination that matches the system predefined number combination. The game can be played in three languages – English, Luganda and Luo – with the first option chosen becoming the default language for subsequent trials. A short code is necessary to participate in the game, with the tariff of the IVR interaction priced at Ush499 (US$0.25) per minute. All correct entries are stored in the system until the end of the month and submitted to auditors for verification before the winner/ winners are awarded the prize.

“When we launched voice SMS we also launched a service where subscribers could play a game, and punch in some numbers in order to potentially win a prize,” says Maheshwari. “All of our campaigns and value added services take into consideration our convenient pricing policy. People like to bet in Uganda, so Gamezone appeals directly to them.

Warid Telecom is a firm believer in the early investment in non-voice and value added services, not only as a tool of differentiation, but as a viable, profitable income stream if developed with customer preferences in mind. Such has been the uptake of Warid’s voice and non-voice services that revenues from these sources showed an increase of over 20 per cent month-on-month towards the end of 2008.

The issue of universal licences has opened up all manner of possibilities with respect to technology choices, and Warid Telecom wasted little time in its roll out of a nationwide WiMAX network. In September 2007 Warid appointed Motorola to design and deploy an 802.16e WiMAX network in Uganda. Warid Telecom has since launched WiMAX, but has taken a conscious decision not to roll it our beyond the city limits of Kampala. “There just doesn’t seem to be demand for it in out of – city areas, the response has been from urban areas, particular from businesses including hotels, banks and insurance companies,” Maheshwari explains.

So Warid Telecom is primarily focussed on the rollout of its GSM network across the country, having estimated an investment of US$450 million CAPEX for its first year of
operation. “Warid is the only company in Uganda and maybe the Great Lakes region using the modern GSM equipment model 2007, which can accommodate more than three million customers with no one missing a call or missing a text message,” commented Zul Javaid, Warid Telecom Uganda CEO.

According to Informa Telecoms & Media, as of end-Q308, MTN led the mobile market in Uganda with a total of 3.13 million subscribers, followed by Zain with 1.87 million and Uganda Telecom’s GSM network counting 1.66 million users. Hence Warid Telecom’s 766,700 users at that time was a significant achievement, highlighting the operator’s ability to garner over 10 per cent market share in just seven months of operation.

“We are the fourth entrant and Orange is going to launch in Uganda imminently, so it is a tight market. Our aim though is to be a strong number two in the next 18 months or so,” Maheshwari forecasts. The operator already topped 1.4 million subscribers as at the beginning of February 2009, representing an 82 per cent rise in subscriber numbers since end-September.

Virtually the operator’s entire subscriber base is prepaid and while it does hold aspirations to build up a portion of its users that settle accounts on a monthly basis, issues related to posting bills and connections still persist. “We are trying to change the entire mindset and are identifying individuals who could be potential post-paid subscribers – such as SMEs and middle managers.”

Warid Telecom’s franchisee plan

Warid Telecom claims to be the first telecoms company in Uganda to simultaneously launch in a number of towns and districts countrywide as of day one.

The operator employs a number of methods to circulate its products out into the marketplace and ensure its standards are kept consistent at all times. This is achieved primarily through the engagement of franchisees, sub-franchisees, customer care centres and business centres nationwide.

Warid Telecom’s franchisees are its partners and effectively operate as extensions of the Warid business as a whole. They offer the full range of products and services including:

– Sale of prepaid connections
– Sale of prepaid scratch cards
– Provision of solutions to customer complaints /concerns
– Delivery of products to sub-franchises, branded and retail shops

When Warid launches its postpaid network, the range of services offered by franchisees will also include:

– Sale of post paid connections.
– Billing services