INTERNET BATTLE CLAIMS FIRST VICTIM
The Broadband Company, launched a few years ago with much fanfare in Kampala, is reportedly winding up its business in Uganda following a decision by the shareholders that it was no longer viable to continue operations in what has become a highly competitive market.
The immediate halt of operations has also raised bad memories, reminding many of the unceremonious closure of Pay TV operator GTV at the onset of the global financial crisis in 2008, when vendors and clients were stuck with equipment, some of it purchased only days before closure, leading to allegations of fraud and pending legal cases, still to be determined.
Some sources with knowledge of the sector have suggested that the UK owned Broadband Company would seek an agreement with FORIS, aka InUganda, to take over existing accounts and continue to provide services, but like with the Broadband Company, coverage in and around Kampala is greatly limited with some areas of the city, inspite of adverts to the contrary, hardly being able to pick a signal.
Amongst those affected by the sudden withdrawal of services is the Kenya High Commission in Kampala, which according to media reports had just paid a years advance subscriptions, only to be left stranded and unable to transact business via e-mode, having to resort to the olden days practice of come in person.
Voice and data business in Uganda is highly competitive, and with Uganda Telecom gradually reclaiming lost territory, now that the new Libyan government has reclaimed its stake in one of Ugandas leading telecoms companies, the stakes are even higher to capture market share.
When the most recent economic crisis struck Uganda, with inflation running wild into the double digit figures, all promotions by telecom companies stopped and the 1/- and 2/- Uganda Shilling tariffs per second for voice calls were literally doubled overnight, however now eating into revenues as consumers exercise restraint when using their phones. Data packages, inspite of the introduction of fibre optic technology, have also not seen tariffs come down further, limiting the market share and making the huge investments struggle to see decent returns being generated.
The exit by Broadband has now triggered a hunt for their clients by other service providers, aiming to capturing added business the company has talked in previous press releases of having 100.000 clients, a figure disputed though by industry observers before deals are struck to sell off the clients base lock stock and barrel. Not a happy holiday season for the staff of the company though, half of which have already been laid off and the other half looking at the same fate before the end of the year.
Remaining in the market now for internet services are Uganda Telecom, Orange, MTN, Airtel, Warid and such direct and specialised providers like Infocom and AFSat, amongst others.
One Response
Sad to see how people easily pull out of markets that when developed correctly could become some of the most lucrative for businesses. As the infrastructure improves, the market needs to offer better prices that will indeed increase business usage and allow African business to compete in the information age with worldwide competitors.
While remote areas that many businesses operate in cannot make use of the fibre optic, one of the more reliable and viable roaming options in Africa are the satellite connections that are currently the market leader in Africa.