How Warid Exit Will Impact Telecom Sector in Uganda

Written By East African Business Week

As the month of March climaxed, India based telecom giant Bharti Airtel confirmed their acquisition of all business operations of Abu Dhabi owned Warid Telecom in Uganda, a conquest, sector experts predict will shake up entire telecommunication industry.

The exit of Warid means MTN, Airtel, Uganda Telecom (Utl), Orange, Smile Communications and recently launched K2 as the only telecom service providers in the country.Warid made their entry into Uganda with a bang causing instant impact on the cost of making a phone call with its cheap promotions that endeared them to the populace. By that time Celtel (Which later became Zain and now Airtel), MTN Uganda and UTL were the only telecom firms offering voice and data communications solutions.

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In January 2008, Warid Telecom made a majestic entry into Uganda at a lavish launch bringing with them a promotion dubbed Bang KB that allowed people to talk for up to two hours on a Warid to Warid after being charged for the first two minutes. Later on, with the trick of making on-net calls cheaper than anyone in the market, Pakalast came in enabling one to make calls for as low as Ushs1,000 for the period of one day before it was revised to 35 minutes.A good number of elite subscribers preferred to pay for a monthly subscription costing them Ush15000 until recently when it was pushed to Ush20, 000.

Despite finding other telecos on the market, Warid managed to become a household name as a very Ugandan rushed to get a Warid number so they could enjoy cheap tariffs. This resulted into a fierce pricing war between 2010 and 2011 that brought the cost of making calls to a record low of Ush1 per second from around Ush600 per minute in 2000. Such was the impact that Warid had on the telecom market in Uganda.

But their strategy was criticized by their competitors who said that such a generous business approach wasn’t sustainable in a growing market like Uganda; to them it was suicidal bringing the price that low. The price wars pinched the telecoms the wrong way with loses being reported in 2012 but the worst impact was poor quality services delivered. People made frequent calls because it was now cheaper and telecoms failed to tame the resultant traffic.

SourceEast African Business Week