Telecom companies have welcomed Smiles Communications Uganda Limited to the market but warned the new firm of stiff competition.

Smiles Communications Uganda Ltd, which becomes the seventh entrant into the telecommunications industry in Uganda, launched its services on Friday.

It has promised the lowest call charges on the market.

Smiles enters the market when the existing players; MTN, UTL, Warid, Zain, Orange and I-telecom are engaged in stiff competition with others enabling their clients to enjoy free calls.

Smiles is offering Shs5 per second compared to UTL's (extra jazz) Shs5.33 per second). Orange offers Shs8 per second.

Warid Telecom is pricing at Shs299 per minute (Shs4.9 per second), while one of MTN's cheapest product land line goes for Shs200 for 45 seconds while I-telecom the latest entrants is offering free calls to clients on the same network and UTL.

However I-telecom is yet to have interconnection to other networks except UTL.

"They (Smiles) are welcome on the market. We are not scared of them but we shall see how they serve the clients", Warid Telecom head of marketing Mr Shine George said.

Uganda Telecom also warmly received the new comers. "Competition is healthy, customer is ideal and we shall fight the battle in the market," Communications Officer Mr Emmy Olaki said.

Chief Executive Officer MTN Uganda Mr Themba Khumalo received the Mauritius based low-cost telecommunications operator.

"It is still early but we are here to welcome them onto the stage," he said during the launch at Kabira Country Club.

Smiles Chief Executive Officer Ms Irene Charnley said the firm is charging a flat rate of Shs5 and Shs7 per second for local and international rates respectively which makes it one of the cheapest on the market.

"For the first time, individuals are offered free electronic identities and voice message boxes without having to own a phone.

We have used these new technologies and revolutionary new business architecture to bring affordable communications to communities that need it most," she said.

Charnley said the costs of owning and using mobile phones are still beyond the reach of hundreds of millions of people in Africa and the Middle East.

"Smiles' technological advantage now allows us to cater for this market by offering the lowest priced calls and even greater savings for voice and text messages", she added. Smiles Communications has invested $30 million (Shs57b) in.