As the big boys of telecommunications, MTN Uganda and Airtel Uganda , are embroiled in price wars, the small boys-Vodafone Uganda, Smart telecom and Uganda Telecom Limited – have formed a ‘‘coalition of willing’’ to combine synergies. The first results of the agreement between Vodafone and Smart Telecom reveal one thing- that the future is bright.
Early August 2015, Vodafone signed a partnership agreement with Smart telecom. The deal allows the former to roam on the laters’ network. Smart telecom has a strong 3G network in Kampala, Wakiso, Mukono and neighboring areas. Vodafone which only depends on 4GLTE needed a network with 3G for voice and data in areas where their 4G does not reach.
Outside the said areas, Smart Telecom also depends on UTL network, thus the UTL-Smart Telecom-Vodafone partnership has been described as the ‘coalition of the willing’’ The first results from this deal, according to sources at Vodafone are ‘‘promising’’. The agreement which came into effect in September saw Vodafone pay Ugx 30m to Smart Telecom, as commission for using their network. Vodafone data is said to be vey popular given her fast internet speeds and thus they get more revenue from it.
‘ ‘ For player who only recently celebrated 100,000 subscribers to give out commission of Ugx 30m to Smart Telecom in the first month of the deal indicates a lot of traffic on their network.’’ noted an industry expert.
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Smart telecom charges Vodafone Ugx. 05 per minute for outgoing calls (on-net) and incoming calls (on-net). On-net calls are calls between Vodafone and Vodafone clients using Smart Telecom network. For outgoing calls-(Local), Smart Telecom charges Vodafone Ugx. 65 per minute. While outgoing calls (International), Vodafone is charged Ugx 50 per minute. Outgoing calls refer to calls from a Vodafone subscriber to other networks using Smart telecom network.
To smart and UTL, the deal is handy. With few numbers of customers, the networks of the two telecoms are underutilized. This means that costs would be much greater that proceeds if creative ways of increasing the customer base is not thought out. This ‘partial merger’ has seen the smaller players survive the monoplistsic behaviours of the big two. To Smart Telecom, the Vodafone deal is a source of revenue for UTL. To Vodafone, the deal is about reliability. The development has seen Vodafone widening her coverage in voice and data area coverage.
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Uganda still has low telecom penetration. Indeed there are fewer new subscribers joining the networks. The growing subscriber numbers on Vodafone (now at 100,000) is an indication they are taping from rivals. Already Smile Telecom the once rising data king are choking to death.
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