Julius Barigaba
12 October 2008
Nairobi — Competition in Uganda's telecommunication industry is set to intensify with the entry in December of I-Tel Ltd, a CDMA mobile telecommunication network operator.
CDMA -- code division for multiple access -- technology offers cheaper call rates, enhanced call capacity and better quality than the GSM platform used in the country's mobile telephony.
Officials promise call tariffs that can only be matched by land lines at the average cost of Ush200 ($0.12) or less per minute. The lowest tariff on the market currently is Ush249 ($0.15) per minute, charged by Warid Telecom.
"Our rates will be better and cheaper. Whatever you say, the costs of running CDMA are lower than any other technology network on the market regardless of interconnection fees charged," said Ronald Kayemba, the company's sales and marketing manager.
Although the company was initially frozen out of its preferred GSM option, its officials argue that the low costs of CDMA will bring in the numbers from the downmarket consumer segment, for whom affordability is a prime factor.
I-Tel president Augustus Caesar Mulenga told The EastAfrican that the first few test calls have shown I-Tel's network signal is already being received within Kampala. Later, the firm will roll out its network across the country.
This will bring the number of active telecom operators to five; moreover I-Tel's entry is expected to shake up a market that is awash with low tariff plans.
Just last year, call tariff rates were lowered across the sector by 10 per cent as the market's old trio of Zain, Uganda Telecom Ltd and MTN prepared to take on new entrants Warid and Hits Telecom.
The firms also offered off-peak call rates discounted by 50 per cent and in other instances, 100 per cent. The promotions, however, were called off for what Uganda Communications Commission termed as poor quality of service as they jammed the companies' switches.
After upgrading their switch and network capacity, the telecom firms again introduced various promotions that have seen prices lowered significantly -- from MTN Zone and Zain's "Chacha" to Warid's Mega Bonus and "Bona Bogere," a Uganda Telecom offer on free calls.
This was not possible a few years ago during the duopoly policy, when the market was tilted in favour of the two main operators UTL and MTN, with the then national cellular operator Celtel having to play catch up.
Because of the entry of Warid Telecom seven months ago, for instance, the highest peak tariff for local calls currently ranges between Ush420 ($0.25) and Ush450 ($0.27), down from about Ush490 ($0.29) previously. Regional call tariffs on the other hand are as low as Ush440 ($0.26) while international calls go for Ush600 ($0.36).
According to analysts, the entry of a new operator at this point, offering still lower rates, will force the other players to further slash their tariffs. At the same time, deploying another form of technology might also leverage the new operators' capacity in the Ugandan market.
MTN, Zain, UTL and Warid, as well as Hits Telecom -- which has yet to start providing services -- are all hooked on the GSM 900/1800 spectrum; I-Tel is the first to resort to other forms of technology.
Sources say that I-Tel has so far made a number of test calls off its Huawei Technologies-built network, put together in less than six months since the company received its license. Its CDMA phones are also supplied by the Chinese telecom equipment vendor.
According to I-Tel, CDMA's capacity for high data speeds will become the preferred choice for companies that are heavy on data, as well as value added service providers and subscribers that use text messaging as a communication tool.
Experts say that a standard CDMA connection has the same digital transfer rate as GSM network, of 9.6kbps, but its voice data is transmitted at 8kbps.
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