MTN Uganda:Monopolizing The Market By Force

mtn uganda

When MTN(Mobile Telecommunications Network) entered the Uganda telecommunications industry, it quickly picked up an local language acronym “Maama, Taata N’ange” loosely translated as mum, dad and I. It embodied a unification factor that created a sense of oneness and easy connectivity like never before, neither of the previous industry players had done such — UTL and Celtel.

MTN Uganda,having realised its predecessors weaknesses, it engaged them in a contention that won masses for it through cheaper communication services and goods in tandem the cartel it signed with the government of Uganda prohibiting entry of new players in the telecommunications sector for at least 5 years.

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As it all boiled down; after 9 years, Warid telecom joined the market in 2008 with such ferocity — disturbingly low offers,clear signal and above all registered 500,000 within its first 12 months of operation.This didn’t go well with MTN, which in a rebuttal,introduced offers such as MTNZone whose success was quite enumerable.  Mobile Money further sealed the deal with an increase in disparity with its competition.

In plain economics,a business’ strength lies in its ability to make profits in the long run,rather than cover its costs of operation in the short run. It was inept of  Warid telecom to forget such a basic and vital principle. Reality checks kicked in over perception, they had spent beyond what they were earning and were bound to liquidate their assets. Airtel was just in time to save the antelope that had danced itself lame before the final party. However, I cannot disqualify the fact that Bharti Airtel offered Warid Telecom an outstanding amount of money to sell out. It should be noted that Airtel tried to acquire 51% stake in MTN in 2008 valued at $19billion, although the deal hit a snag prematurely.

MTN drinking Warid’s milkshake

Of course, Warid will lose its top management in its merger with Airtel. So, MTN is taking this as an opportunity to shoot back at the woes Warid brought to it — memetic advertisements.Such monumental ads gave MTN a run for their money and it is for this reason that they taken this step to aggressively advertise. The recently dubbed “We Believe” campaign geared at helping Uganda cranes qualify for world cup finals (among others) is inextricably interwoven with the effective principles of communication. Such campaigns strike an emotional attachment, increase credibility and hence choice over others in times of judgement.The advantage here, is; MTN is the only company that registers profits from this industry,the possibily is diminishing its resources are minimal, besides having the highest dominance — 44.5%, Airtel and Warid at 38.5% while the rest share 17%.

MTN goes aggressive on social media

In the past 8 months, MTN’s social media reach has grown by over 100%. MTN  having the highest number of Facebook likes in Uganda is highly coveted by many social media marketers. However, in the recent past there have been several instances of negativity towards MTN on social media. Is this the reason they hired a new social media manager?Well,results are quite positive,there is an increase in interactivity and communication. The speed at which internet penetration is in Uganda is being used as a leverage for MTN to seal the difference in its social media following. For instance; hijacking a tabloid story of return of an embattled artiste from abroad,Iryn Namubiru, to vend their products.


Airtel and Warid marriage

In my opinion, Airtel doesn’t have a good reputation in the public eye. Even after rebranding a couple of times, it still survives on past success alongside its affiliation to the Bharti Airtel conglomerate. The merger with Warid will not help much, it will actually retard Warid’s growth before it was acquired. Vanity metrics are likely to be used in defence to the closure in gap between MTN and Airtel subscribers. Oh, by the way, MTN is rumoured to be in plans to take over embattled UTL(Uganda Telecom) which has about 1 million subscribers out of the 14 million mobile users in Uganda. Notably, MTN’s subsidiary services such as Mobile Money will monopolize the market fully, Airtel money and WaridPesa having failed to live up to the standard. MTN Mobile Money is Uganda’s fastest growing service and 3rd world wide as per GSMA Research concluded recently and the major reason for this is the significant number of unbanked people in Uganda. This kind of disruption was championed by Safaricom’s M-PESA that has became a blockbuster success story of mobile transactions on the international scene. MTN is trying to emulate this through continued widespread of Mobile Money services.

In conclusion, the critical decision makers seem to resonate in natural frequency with MTN, they play an influential role in mass usage of its products and services above making it a key market leader. The metrics are a bonus. Does this cause a detrimental effect to its competitors??Let’s continue in the comments.

  • Kahill