Uganda launches telecom service for low income market

December 14, 2009 • Mobile and Telecoms

Uganda’s seventh mobile telephone operator, Smile Telecom, strives to serve as many poor Ugandans as possible, who may not afford a mobile handset or standard phone, but can pay for a phone call, announced the country’s digital news publication, The New Vision.

Given the fact that low telephone penetration in Uganda is directly linked to low GDP penetration, the new operator Smile Telecom plans to address the low income market by offering phone services that don’t require a handset, but instead a given PIN code. So far, over $30 millions have been invested into this market.

“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, in Kampala recently. The company will share the required infrastructure with WARID Telecom.

Since its liberalization in 1998, Uganda’s telecom industry sees now around 10 million people with access to telecommunication, up from only 3.000 initially. Although network coverage exceeds 90%, the actual penetration and tele-density is still low at a figure of 35%.

The answer for Uganda’s telecom future is reduced call prices and affordability. The Smile Telecom project, in which clients use a PIN number to log on any payphone and make calls, was tested successfully before in KwaZulu Natal province, South Africa.

Currently, the company aims to expand in Tanzania, South Africa, DR Congo and Nigeria with the same low-cost phoning plan.

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