Airtel Uganda is reported to have ended the 2016 financial year with 85.6% growth in net profit to Ugx160.45bn.
This growth was attributed to improved uptake of mobile money, value added services and data. The growth of Airtel’s profits has been on an upward spiral since taking over of Warid Telecom on 13/05/2013.
Financial reports show that the company’s revenue from Airtel Money increased from Ugx69bn in 2015 to Ugx128.42bn in 2016. Airtel Money is indeed catching up with MTN Mobile Money. Airtel accounts for 44% mobile money agent market presence while MTN’s is 57%. Airtel grew with increased transaction value from 36% in January 2016 to 41% by September 2016. Way back in 2013, Airtel and Warid – which merged in April 2013 – had a combined market share of 31%. MTN’s share was 63%.
Airtel’s growth spurt was partly a result of the company prioritizing mobile money during the term of its previous chief executive officer, Tom Gutjahr in addition to changes in regulations. Bank of Uganda’s Mobile Money Guidelines introduced in October 2013, prohibited exclusivity agreements between mobile money service providers and agents. As a result, the proportion of non-exclusive agents has increased by 48% – from just 16% in 2013 to 64% in 2015.
MTN on the other hand lost a quarter of its mobile money customers last year after disconnecting 3.7 million subscribers who did not fully comply with regulatory registration requirements. The changes in leadership after the departure of former CEO Brian Gouldie might be one of the reasons as to why Airtel experienced this growth spurt. Gouldie came in with a sensation wanting to be more open about the operations of MTN. At media briefings, he often gave more information than his predecessors. Key among them was the net profit of the company. At that time MTN was having on low customer confidence resulting from a tainted mobile money platform due to a scandal where the company lost about Shs10b and poor quality of service. Gouldie later approved a Shs18b mobile money platform upgrade at the end of September 2014. The system was taken down for two days and a new one installed.
Gouldie is said to have been the opposite of the former boss Mazen Mroue. Mr. Wim Vanhelleputte later replaced Gouldie in August 2016. Mr. Vanhelleputte joined MTN Uganda from Airtel DRC where he has been the Managing Director since February 2016. In July 2015, Mr. Vanhelleputte served as an Executive Director for Key Business Unit Within Africa at Bharti Airtel Limited. With such an experienced man, MTN is back on track and Airtel may find it hard to repeat the incredible feats of 2016.
Back to old times
In the beginning there was Celtel. In 2008, it was officially announced that Zain Group would change the brand name from Celtel to Zain in 14 African countries. Zain Uganda's managing director at that time Yesse Oenga, said Zain Group anticipated becoming one of the top 10 global players in the telecom sector by 2010 and within a month, Zain had fully replaced the original branding of the company. Mr. Oenga’s dream perhaps didn’t come to pass as Zain adopted Bharti Airtel as its new face of business on November 23, 2010. Airtel didn’t rest however and went ahead to acquire Warid Telecom; a company which had amassed followers as a result of lucrative call offers branded ‘Pakalast’ and ‘Kawa’ in addition to SMS bundles where a subscriber would get 1000 messages at Ugx1000 valid for a week.
As the saying goes, “Old habits die hard” as one company took over the other, they without doubt kept on inheriting bad habits from the old regimes. Airtel’s acquisition of Warid brought on board some good talent but by osmosis, the devil stayed on the show.
What ails Airtel?
For now, let me talk about Airtel’s Internet. As the daily internet bundles have become part and parcel of every one’s life. I am now used to the “You have used 80% of your daily internet bundle” after just five minutes of loading an internet package. Need I mention that I first disable background data so that no auto downloads take place? If that happened with uninterrupted 4G internet that all these companies allege to offer the complaint wouldn’t be that relevant. But the phone network bar shows E (Edge), H (HSDPA/HSPA) and in some rare circumstances 3G (UMTS). So does the phone have a problem or is the 3G experience actually 2G?
Airtel hiding behind intensive advertising campaigns and lucrative offers lies a network that is probably incapable of handling the amount of customers they got after the takeover of Warid Telecom. Airtel network is terrible in most areas and No, I wasn’t upcountry. I was in the former Bahesi hostel right next to the Airtel Headquarters in Bugolobi. There is a mega mast right next to the hostel but network is off, not talking about the data which keeps flickering on and off.
Airtel internet is really slow and predominantly 2G. If you set auto network selection mode, your phone will forever show E in the network bar. As if that’s not bad enough as soon as you load the data bundle you get the notification reminding you of the 50% data you have already used. The social packs are slow and one usually suffers from delayed arrival and sending of messages and they too get depleted as fast.
If the data had problems but the network for calls is okay, it would not be so bad, but alas it is also terrible. Making calls between various Kampala surburbs, Airtel to Airtel one experiences unclear voice calls and the words ‘sorry’ and ‘pardon’ become essential to the success of your conversation. If us here in the city center suffer with such terrible network, it’s only left to the imagination what the people upcountry go through.
Ever wanted to send or withdraw money urgently? Only to reach the Airtel Money agent and they tell you the withdrawal code has expired? Or worse still ‘network teliiko bambi’ (am sorry the Airtel money network is off). These are the challenges in Airtel money and they also include having to call the sender to give you a code to withdraw the money they just sent you. One wonders how a person with an emergency is supposed to call their rescuer again (remember they already called to ask for the money) before they get the help they so need.
Ok you must be thinking, why not call their customer care? Airtel customer care has an average waiting time of at least ten minutes. In those minutes, a caller is tortured with terrible music that induces hunger, anger and outright fury and by the time your call is picked, you are infuriated. If you are lucky and your call is picked by a customer care assistant, they all sound bored and uninterested and behave as if you the caller are the source of all their life’s misery. This is a trait Celtel customer care assistants had from way back.
Airtel is like a man who takes on a second wife when they can’t properly take care of the first one. The question in my head remains; was Airtel really ready for the takeover of Warid way back in 2013? If yes, why haven’t these issues been solved 5 years down the road?
Just like Goliath was boasting and throwing his weight around only to be taken down by the young David, unless serious changes are made, Goliath will be felled by a single stone. It’s already happening, just look in the various group chats on WhatsApp, person X changed from 075xxxxxx to……