How can Airtel Uganda recuperate from MTN’s new aggressive price wars?
We broke the news that MTN Uganda early this week dropped the bombshell and resumed where Warid Telecom left off with massive price wars in the telecom market that saw them slash their call tariffs by 45%. MTN’s dropped their per-second tariffs from 5/= to 3/= per sec, which is the same rate as UTL, other telcos like Africell and Airtel Uganda charge 5/= and 6/= to 7/= per sec respectively.
So, now that the cat is out of the bag, how can Uganda’s second biggest telecom, recover from MTN’s new aggressive price wars? This move by MTN Uganda will definitely deeply cut into its biggest competitor’s revenue share and also slowly but surely trade on what has been the Airtel’s upper hand– and that is affordability. Something many people didn’t realize, is that MTN actually increased their MTN zone rate to 7/= per sec from 6/= per sec, and that right there is a small loophole that other telcos can capitalize on.
With MTN voice bundles, the telecom giant is now toe-to-toe with Airtel Uganda’s voice packages like Kawa, Pakalast, and Mega Bonus packages. One thing is for certain, MTN’s new strategy aims to attract more subscriber numbers as they struggle to hit the 15 million subscriber mark from the 11 million mark they hit recently. MTN’s price cuts will obviously eat into the company’s revenue share, but Airtel Uganda actually has a slight advantage over MTN here, but this is like looking for a needle in a haystack.
Behold Airtel Zone
Did you know that Airtel Uganda has Airtel Zone? Yes, in principle it works the same as MTN Zone. It gives varying discounts per cell to customers in different locations throughout the country. These discounts are communicated directly to the customer’s phone showing them the different discounts. With Airtel Zone, you can get a 70% to 100% minimum discount at any given time but MTN on the other hand has a much lower discount threshold (5% to 99% discount), which gives Airtel Uganda a slight upper hand and we feel they can use this to compete with MTN but the issue here is that this all clings on customer’s willingness to switch to the service. Customers will have a more value for money on discounts on calls and will be able to talk longer.
Data Market still lacking
Even if MTN has a shiny new 4G LTE network, its pricing is not the most pocket friendly given data runs out pretty quickly compared to other inferior technologies like 3G. Airtel can first put more focus into pimping up it data network and then transfer their price wars to the data market. It is clear that data is reigning over voice as more and more Ugandans are preferring using data through apps like WhatsApp, Messenger and Viber for communicating. So beyond the Airtel-MTN price wars, big competition in the data market can always come into play.
Airtel should drop whatever they are doing and quickly react. It may not necessarily be reduction, but sensitizing the masses on the great offers and edge they already have like Airtel Zone on top of exploring data offerings like unlimited data at affordable pricing which seems to be their last straw. Whatever happens during all these price wars, all we are sure of is that the customers always comes out the victor.