Uganda’s top telecoms are at it once more, using enticing promotions and discounts on simcards with the anticipation of winning over new customers from each other.
In a commonly televised advert, a man holding his girlfriend by the waist, the couple’s hands later intertwined and a yellow simcard in a wedding ring box is MTN Uganda’s way of courting customers.
In its “Start a new life” campaign that began early September, MTN Uganda told its potential customers that they needed to take a step to a better relationship where they could commit because they have found better.
To spice it up, some freebies came along with this announcement. The telecom went ahead to introduce 30 free minutes, 100 free SMS, 100 free MBs and free Mobile Money worth Shs1,000 once one buys its simcard at Shs2,000.
During the same period, an Airtel advert emerged wooing Ugandans too. The advert told Ugandans that life was better with Airtel and that if they got a simcard today, they would get more from life. As if the two telecoms were reading from the same script, Airtel asked potential customers to recharge a new simcard and get 30 free minutes, 200 free SMS, 200 free data MBS and free Airtel money worth Shs1000.
The announcement came soon after the telecoms had made changes in their data bundle products.
Why the move
As at end of June 2017, the MTN Group half year financial statements revealed that the telecom’s market share is 55 per cent, with about 11.2 million subscribers.
MTN’s chief marketing officer Olivier Prentout, says this is a win-back campaign following government’s move to switch off unregistered simcards.
“We started it as a result of the mandatory switch-off on unverified SIM cards that saw several subscribers lose their numbers. The switch-off was a requirement by all telecom companies to comply with the directive from the Uganda Communications Commission (UCC),” he said.
Like MTN, Airtel was very alert. “We had our customers that were switched off by the regulator so this is an offer telling them how to switch back their simcards and what they stand to get. We also have people who are not on Airtel and are telling them to join because we have something for them,” Airtel’s public relations officer Faith Bugonzi says.
Telecoms such as MTN are unable to assess the impact of the simcard switch off because “the information is not yet tabulated.”
Much as MTN says it led the scramble for new subscribers, Ms Bugonzi says the move has nothing to do with MTN.
“We were thinking about doing the same thing,” she says.
On the other hand, other telecoms such as Africell have been putting up a similar fight. In the past months, Kampala streets have, on a daily basis, played host to young men and women offering simcards to pedestrians at no cost.
Public relations and media consultant Steven Baryevuga, confirms them as Africell sales agents renumerated for selling simcards and airtime.
“They operate with regulation from the relevant bodies, and within the laws. Africell’s target is to reach customers wherever they are,” he says.
Mr Baryevuga says Africell’s subscribers have been growing from the time the network was acquired from Orange.
“Africell inherited 600,000 subscribers. The numbers have grown to over 400 per cent,” he says. Like its competitors, Africell is lining up an array of offers that will be competitive by pricing, data volume and voice.
One of the latest entrants into the industry, Vodafone is watching but acting too. Vodafone, whose coverage remains in Kampala, Mukono and Entebbe, has been running a number of promotions that give customers free data for months.
Are telecoms struggling?
Uganda Communications Commission’s executive director Godfrey Mutabazi, says this is more of a marketing strategy than a tactic since telecoms are here to trade and stay in the market.
“They have to out-compete each other but it is important that potential subscribers understand if the incentive is a genuine offer. If they are not sure, they should do consultations,” he says.
He further says telecoms are struggling amidst a transition from voice business model to a data driven model.
“Revenue is going down as most people rely on data. So voice is complementary. Most people are on social media which does not bring in revenue,” he explains in an interview with Daily Monitor.
Mr Valery Okecho, corporate communications manager at MTN, thinks otherwise.
“I would not say they are struggling. We have consumer products and we have to find a way to engage potential customers and it is competitive. We all need to position ourselves,” he says.
Is this sustainable?
Mr Baryevuga says campaigns to woo customers are part of telecom’s core responsibilities to increase subscribers while offering good services.
Ms Nada Andersen, the chairperson of the Uganda Advertisers Association, thinks telecoms could be putting their money in the wrong places.
“A lot of that money is wasteful money because it is not necessarily attracting any new telecom users. It is not going to attract anyone because costs of communication are very high,” she says.
Ms Andersen says telecoms are spending a lot of money on communication as customer care remains in a terrible place where one hardly gets clear answers and good response time.
She further explains that the market only has a few people who are willing to buy a new simcard.
“The fight is there but I do not think it is sustained in the long run because people settle for a network that suits them in terms of who are on the same network,” she explains.
She advises telecoms to concentrate on improving services with end-users by developing genuine offers.
“If you have tailored offers for people who use a lot of data based on the amount of data they use in the month, you give them bonuses. You determine which people depend on calls and you give them calls so the people can make a choice of what they want to buy,” she says.
Ms Andersen says the telecom with the biggest subscriber base stands to gain in this scramble for customers because most people will evaluate how much it costs them to call people on other networks. Also, some people are likely to drop their simcards to enjoy the offer.
“This number could go up. All of a sudden, you will have people having simcards on the same network but this is not sustainable in the wrong run. The innovation is just not there,” Ms Andersen says.
Customers weigh in
A section of Ugandans commended the telecoms’ move while the announcements left old customers grumbling. Commenting on MTN Uganda’s official facebook page, Mr Moses Mpumwe wondered why he would get a new line yet his old simcard had been blocked.
Mr Maxwell Adriko asked why such incentives were unavailable for existing customers.
On the other hand, the launch of the new products has left a section of Ugandans questioning how telecoms can woo new customers when their services are currently not up to scratch.
Mr Wilson Araali loves Airtel. But his problem with the telecom firm is it consumes his data within a very short time.
Mr Denis Wafula says, “Your MBs run out so fast. I am planning to stop buying bundles,” he writes on the Airtel Facebook page.
Other subscribers continue ranting about the bad network among telecom companies.
“The network is still bad. I cannot call someone in Mpigi at night when I am in Jinja,” Mr Sula Kayingo says.