...is it the grass that suffers?!
Not all the time. And at least not in business. The recent price wars in Uganda's telecom sector are a clear example that some 'elephant fights' do actually benefit the guys at the grassroots. The prices are skiing further south and I am sure the customers are even going to get better services.
One evening the relatively new company, Warid Telecom, decides to drop the internetwork rate to 5 shillings per second. The so called drawing of the first blood. And while the country is still celebrating this blow to the head, and planning to buy more Warid sims, the other companies throw their punches in an attempt to equalize. But then Zain quickly knocks out their teeth by dropping the rate to 3 shillings. This is the kind of fight worth cheering on.
Why? Coz we have come a long way! When the grandfather of mobile telephony in Uganda, Celtel (aka Zain but still broadly known as Selotelo to the old folks), started operations at home, I was a beardless skinny 17 year old lad in senior two at the famous Busoga College Mwiri. The cost of a mobile phone, a rather massive gadget at the time, was quite obscene. Two million Uganda shillings (that is what I heard back then!) was a rather high price. This was the kind of money that would be sufficient to take your child through the four years of O'level in a good school such as Mwiri. Or even a much better school like the one you went to. These gadgets were owned by a few individuals, who not only really seriously needed them but could also afford. These included the president, ministers, a few members of parliament and selected medics among others. The only person I remember owning a mobile phone at that time was my senior brother in law, a respected and much sought after orthopedic surgeon. I think the service was postpaid and it was also pretty costly. Someone informed me that Celtel charged a minimum of 10 US dollars (close to 200,000 Shillings now).
And then MTN arrived on the scene in 1998 or there about. I was a freshman at Makerere University , just settling into Lumumba Hall. More people acquired mobile phones. The prominent model at the time was the Ericsson 628. The famous one that came to be known as the 'block' or 'phone booth'. Every parent must have somehow owned one. Those were the days when phones were bought from possibly one MTN or Celtel outlet in Kampala. They were brand new phones. Wrapped in polythene and packed in a box. And they were still pretty expensive although MTN had managed to bring the prices down. Oh, and people basically held the same phone model! Back then MTN levied an evil monthly tax called ‘Service fee’ to have you on their network. You basically had to pay 18,000 shillings (later cut to 10,000) every month if you wanted to be able receive calls. If you intended to make a call then you would have to throw in some airtime as well. I remember a few students using their faculty allowance to buy phones and later on failing to maintain them because of the service fee. For them holding a phone was a status symbol. To some of us, moving around with a mobile phone that could neither place a call nor receive, was equivalent to one pushing a car to and fro work just to prove to his colleagues that he has wheels. That was dog poo!
And suddenly UTL Telecom came along in 2000. The students’ choice! I cannot forget the famous Mango campaign. UTL made it possible for most of us to own mobile phones. I bought mine, a Motorolla V28, complete with a radio and headphones, from UTL. While UTL started off by not charging service fee, MTN insisted on continuing to ‘recover its costs’ by fleecing its customers. And sadly, being on the MTN network was a status symbol for some. Guys would deliberately stroll around with useless thirsty phones, just because they were on MTN, and they found it rewarding to tease us for being on a students’ network. But we were ‘on air’ all the time and they were off most of the time. The term ‘service fee’ came to be as popular as ‘ability’ or ‘potential’ are today.
But the fact that UTL had joined the fray meant that the monopoly of Celtel, and now MTN, was busted. The costs came down. Second hand phones hit the market making it even possible for the common guy on the streets of Kampala to own a mobile phone. MTN finally dropped their silly monthly tax. The three elephants fought. The grass enjoyed the benefits. The war, if I recall very well, initially revolved around network coverage. Who was covering the country best? Celtel rebranded and lowered the prices further down that the once expensive, for-the-rich-only network now became quite cheap and even despised by taxi drivers.
Numerous promotions have come and gone in the course of these companies fighting for customers. New and cheap phones from China were offered at give away prices sometimes two for the price of one. Do you remember Kabiriti (MTN), Kiboko (Celtel), Katikitiki (UTL), Katala, and Katoki?! I remember buying a Kabiriti during one Christmas promotion, for just 25,000 shillings and using it for a year plus. Can you imagine, that inflation aside, a guy who bought the first Celtel phones back in 1993 would have driven away with eighty Kabiritis about two years ago?! Air time has been split from the once smallest denomination of 10,000 to as low as 500 shillings. And probably even lower! Simcards are sold on the streets like bubble gum. Now even housemaids have mobile phones and can afford to load airtime using the small savings they make from buying tomatoes and onions from the road side market. Those on Walidi can call their relatives and talk pakalast!
Close to twenty years down the road, since Celtel first penetrated the mobile telephone market in Uganda, we have six or so players in this market. One of the latest entrants in this battlefield is the famous Warid Telecom (Walidi, pakalast) from the United Arab Emirates. These guys mean business! They have brought the prices very down and are still doing so. And they have brought the former heavy weights (Celtel and MTN) down on their knees!
And can anyone say the grass has suffered? In a sense yes! There was a time when the big guys carried two phones (one MTN and the other Celtel) just to be in touch with their cronies on both networks. At an affordable cost! Sometimes Celtel made sense when you were travelling to places, like Masaka, that were outside the network coverage of MTN. When the Ka-phone revolution came in even students could afford to carry two or three phones to reap the benefits of the intra network price battle. The advent of the dual sim phone didn’t help much because the list of service providers was growing big. You simply had to carry more phones. Remember the days of the ‘phone tycoon’ advert? It all looked like a joke back then but this now is the life of the average Ugandan phone user. Thieves also took advantage of the situation. They could buy a sim card off the street, use it to make their devious deals and then throw it away.
But can we really call that suffering?! When we can send money to anywhere in Uganda using these phone companies? When we can access the internet on our phones? When even pets are soon going to own mobiles? No way! All we ought to pray for is that these elephants should fight more and more and more. Someone please fan these fires. Because we are definitely reaping lots from the price wars of this perfect competition. Things are getting better and better.
In the meantime just brace yourselves for more splashes in the taxis as guys bleat “Harrooo, Harroooo. Norinkahe?...Munha obukoko bwazaala?...Wanjiiiii…nga sikuwulira....Eeeeeh, awadifo...eeeh!”
I know this is not a perfect way to end a nice story. But just imagine if this sort of thing were to happen in our politics: the wars with benefits, not the splashing!
