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Edouard Blondeau discusses the challenges of gaining a strong market presence while keeping pace with the explosion of telecom price wars and substitute products in Uganda.
Mobile communications subscribers in Uganda totalled 9.4 million as of December 2009, and Orange Uganda accounted for roughly 10 percent. At a tele-density (the number of telephones per 100 people in a region) of 32% in a country without number portability, it is not easy to achieve market share figures like that without establishing a strong presence through offering an innovative product portfolio and of course investing in human capital which is exactly what Orange Uganda is doing. It is focusing on mobile value added solutions and network rollout country-wide.
Edouard Blondeau, Orange Uganda’s Chief Executive wrestles with these issues on a daily basis. Here Edouard explains the challenges Orange faces and how it is coping with rapid product proliferation, price wars and changes in the media environment. His view of Uganda’s telecom market is: “in emerging markets, consumer education of the available solutions is essential. Users easily get swayed by excessive marketing, which is ultimately about changing consumer behaviour- i.e. connecting with the subconscious mind, where purchase decisions really get made. Orange Uganda’s focus, however, is to offer quality services for repeat businesses as well as leverage from existing customer references.”
How do you find Uganda’s telecom market environment? What are your immediate priorities going forward in light of the competitive rivalry?
The market is quite competitive. There are more than seven players to date and the number keeps increasing. Even more, this is an environment with one of the most competitive rates in Africa. Firstly, the taxes are very high. Excise duty at 5% and VAT at 18%, while operators end up paying 30% taxes on any income after expenses. Secondly, there are limitations with energy and infrastructure which push the cost of doing business the wrong way.
One of the first initiatives we undertook at Orange Uganda was to differentiate ourselves from competitors. Agenda #1 was to implement a new and faster network. To this end, we implemented the third generation plus (3G+) network, a High-Speed Downlink Packet Access HSDPA or its High-Speed Uplink Packet Access (HSUPA) technology. This has been the main differentiator that has enabled us to provide excellent voice and internet (data) services. So far, our network provides the fastest Internet connection speeds in the market.
What is Orange telecom’s current product portfolio and market share? What are some of the biggest challenges you face as an executive in managing such a portfolio?
Orange Uganda offers all the products and services that other mobile operators are offering. We have voice services with prepaid products like Talk Now per minute, Talk Now per second, and the youth variation Buddy Talk. Currently we have a number of on-going promotions like Gyekiri where we have free orange to orange calls without paying any subscription fees. You load, keep your airtime and get free calls.
We also have an offer on international calls. Orange telecom, our parent company has wide global coverage with presence in most major markets notably Asia, Europe and the Americas. This gives us and our customers economies of scale whereby one can call to over 16 countries including USA, UK, India, Pakistan and many more at a same rate as a local call. This means, with your Ugx. 300 airtime balance, you can either call a person in Mbuya or London. It does not matter. It is the same price for prepaid voice services.
In response to the market needs, we also have postpaid subscriptions for clients who want to benefit from more attractive rates. This package is ideal for both organisations and individuals as it offers more attractive discounts and incentives. We also have internet products like mobile internet which works on i-phone or any other data capable phone. Our ‘internet everywhere’ package, a plug and play modem works on any computer and provides very fast internet connection speeds, everywhere you find the Orange Uganda network.
As you know, telecommunication is all about convenience. In this regard, we have recently implemented a feature where you are able to purchase any internet package from anybody without using cash. You don’t need to go to any Orange shop. You just dail *133# and get a menu of options, where you can select a product bundle of your choice.
Since inception, our internet solutions have been very popular with many corporate clients looking for reliable communication solutions. This has greatly helped us penetrate the market. Many individual users have found our ‘internet everywhere’ modem very reliable and adequate. Our current infrastructure is based on modern technologies which are energy efficient, robust and interoperable. This means we can easily adjust to accommodate many users without noticeable change in quality or connection speeds.
What challenges are you facing as you attempt to establish your footprint in this market?
Every business faces challenges. To compete in any new market, you need a humble approach. We have decided to first listen to the customer instead of aggressively offering what we think the customer needs. Uganda is a market with discerning consumers. They want value for money. We are avoiding the trap of offering what is already in the market. Because innovation is one of our core values, we want to anticipate customer needs and proactively meet those needs. We have recently expanded our data solutions and the final challenge is how to effectively communicate to the customer what we have in store.
SBR’s June issue reported that Orange’s internet is slowing down. What is going on?
We monitor the state of the network regularly, and we have been pleasantly surprised to find that internet subscriptions grew faster than expected. This has been a tremendous success, so we are actually working on an ongoing basis to adjust the network speeds. Our first phase involved upgrading our international bandwidth. We are working on making it fully redundant, so as to address the problem of frequent fiber cuts that are happening in Kenya.
We were the first operator to connect to TEAMS (The East African Marine System) back in October 2009. This was a few months after the arrival of the Seacom cable in Mombasa, thanks to our sister company in Kenya. We are now able to provide high internet speeds. But this is just one of the initiatives. As mentioned earlier, our new 3.5G+ HSUPA technology which we have been the first to introduce in Uganda, offers fast internet speeds. This is the first network of its kind in Africa. The Orange Group introduced this technology in France, so we decided to bring it to Uganda, which is also a highly competitive market. We are happy that the market has been able to differentiate our internet services as the best in terms of fast internet connections and network availability.
As the market matures, the cost of acquiring new clients will inevitably rise. How do you plan to remain afloat?
It is always challenging to operate in a competitive market. You have to keep thinking of innovative products and better ways of delighting the customer. We decided to undertake a gradual market penetration. We are implementing a 5-year investment plan and lean management. We endeavour to be efficient and welcome innovative ideas through small teams. When you have a small structure you are able to react faster. These and many other initiatives help us to keep afloat.
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