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Smile Telecom Targets Low Income Earners
Kampala - THE launch of Smile Telecom, the seventh mobile telephone operator, has brought a new dimension to the telecom industry in Uganda. Smile is basing its business model on tapping into the average Ugandan who may not afford a mobile telephone handset or standard phone but may have some money to pay for a phone call. Industry watchers say if the model is followed to the letter, Smile Telecom will help to hook many poor people onto phone services. Research has shown that low telephone penetration is directly linked to low gross domestic product (GDP) penetration. To use Smile services one does not need a mobile phone handset. Subscribers will be given PIN codes. "We shall have a truly transparent pricing. You shall only pay for what you have used. We shall charge sh5 per second across all networks," said Irene Charnley, the Smile Telecom chief executive officer. Smile has invested over $30m into this market so far. According to Charnley, the firm has its own equipment, but is sharing masts and other infrastructure with WARID Telecom. The telecom industry in Uganda has made significant gains in the last 10 years since the sector was liberalised in 1998. There are now about 10 million people with access to telephones up from just 3,000 in 1998. Network geographical coverage is also at over 90%. But tele-density or actual penetration is still at about 35%. That means out of 100 people, only 30 to 35 have phones. Tele-density is the number of landline telephones in use for every 100 people living within an area. "The key challenge is affordability given the low GDP of Uganda," said Patrick Masambu, the Uganda Communication Commission chief. Smile agents operating pay phones will be the link with customers in their communities. Clients with PIN codes can log into any of these phones and make calls. The Smile service was pioneered in KwaZulu Natal province, a very densely populated area in South Africa. Uganda is the first country to launch commercial services after the company got its first licence here. Smile is also seeking operating licences in Tanzania, South Africa, DR Congo and Nigeria.
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