Celtel deepens market niche
Jun 06, 2003
Celtel Uganda is currently on a massive campaign to re-invent itself and re-position its brand in the competive world of mobile phone services. Last week, Lars Andersen, the Celtel managing director, briefed Andrew Kanyegirire on their corporate goals
Celtel Uganda is currently on a massive campaign to re-invent itself and re-position its brand in the competive world of mobile phone services. Last week, Lars Andersen, the Celtel managing director, briefed Andrew Kanyegirire on their corporate goals. Below are excerpts of the interview.
Question: Briefly, what is the ownership structure of Celtel Uganda?
Answer: Celtel Uganda is 90% owned by the Dutch company MSI, and 10% by the IFC- International Finance Corporation in New York.
Q: Why did you decide to ‘re-launch’ yourselves?
A: The brand in itself was confusing in a number of ways and the most important one was with the colours. People would ask, ‘are you blue, are you orange, are you black are you white? What are you? Then MSI on a corporate level decided that on the ‘Pan-African’, basis we had to review the whole brand identity. Then we volunteered here in Uganda to be the first one to introduce that. We’ve got a lot of attention. We are orange, we are bright, we are signaling happiness to the future. We also decided to have more visibility and more distribution points. When I took over we had about 100 distribution points people had difficulty finding us. Now, we have an expansion project with 700 more distribution points clearly marked in our orange color.
Q: What has been the reaction from your customers?
A: The reaction has been extremely positive. People had sort of missed some actions from Celtel, some profound genuine action, trustworthiness and honesty to make sure that Celtel would be here in future. So now we have re-affirmed that we are making investments, we are here to stay and we are building up the networks. What we have done is to strengthen the customer care, the accessibility and the coverage. We have also strengthened the competitiveness on pricing, we have launched the ‘web to sms’ and ‘sms to web’ info services so that people can, access these features.
Q: Has Celtel now clearly made a break with its high-end image of the old?
A: You see eight years ago Celtel was the incumbent and in those days mobile communication was extremely costly. So of course it attracted only the better off. But now, Uganda is following the pattern that has been seen all over the world in that markets are opening up and penetration is getting wider. So, that’s why we are moving down, so that we can cater for the affordability of the larger part of market. Back in November, we slashed prices so as to have the same price levels as our competitors. We have just gone one step further, which is a giant step and that is to give people a choice between being on a rate plan that bills you by the minute or being on a rate plan that bills you by the second.
Q: Why was it so important for you introduce per second billing (rate champion)?
A: It was important for us to make sure that we could also address the market segment that had a calling pattern that would be better off having ‘per second billing’ and very low sms prices. We now have smsing of 88 shillings inclusive of VAT. This rate plan is designed so that if you have shorter conversations it is to your advantage or if you have conversations off peak, it’s definitely to your advantage all the way through. So it will appeal to some people that have that system in their calling pattern. Where as other people that predominantly have longer calls during peak hours would be better off on the whole market being on our ‘cash and talk’. So, we cater for two different segments here and it might be confusing to people but, we will interview the people about their expected call pattern and then we will, guide them through which of our two plans are the most advantageous for them. And they are free to change their pattern once a month free of charge.
Q: All this sounds like a costly exercise. How have these costs matched up to the benefits received to date?
A: I have persuaded the owners that this is a sound investment. We don’t simply look at the calendar year 2003. We look further ahead. If people are in this for the quick money, then they shouldn’t go into mobile communications. It costs money to earn money and heavy investment is necessary. The return is coming down the road and for Celtel all the returns and all the proceeds will be going back into society. They will be going back into the network and into social commitment. We don’t pay a dividend and we don’t foresee to pay dividends in many years to come.
Question: Briefly, what is the ownership structure of Celtel Uganda?
Answer: Celtel Uganda is 90% owned by the Dutch company MSI, and 10% by the IFC- International Finance Corporation in New York.
Q: Why did you decide to ‘re-launch’ yourselves?
A: The brand in itself was confusing in a number of ways and the most important one was with the colours. People would ask, ‘are you blue, are you orange, are you black are you white? What are you? Then MSI on a corporate level decided that on the ‘Pan-African’, basis we had to review the whole brand identity. Then we volunteered here in Uganda to be the first one to introduce that. We’ve got a lot of attention. We are orange, we are bright, we are signaling happiness to the future. We also decided to have more visibility and more distribution points. When I took over we had about 100 distribution points people had difficulty finding us. Now, we have an expansion project with 700 more distribution points clearly marked in our orange color.
Q: What has been the reaction from your customers?
A: The reaction has been extremely positive. People had sort of missed some actions from Celtel, some profound genuine action, trustworthiness and honesty to make sure that Celtel would be here in future. So now we have re-affirmed that we are making investments, we are here to stay and we are building up the networks. What we have done is to strengthen the customer care, the accessibility and the coverage. We have also strengthened the competitiveness on pricing, we have launched the ‘web to sms’ and ‘sms to web’ info services so that people can, access these features.
Q: Has Celtel now clearly made a break with its high-end image of the old?
A: You see eight years ago Celtel was the incumbent and in those days mobile communication was extremely costly. So of course it attracted only the better off. But now, Uganda is following the pattern that has been seen all over the world in that markets are opening up and penetration is getting wider. So, that’s why we are moving down, so that we can cater for the affordability of the larger part of market. Back in November, we slashed prices so as to have the same price levels as our competitors. We have just gone one step further, which is a giant step and that is to give people a choice between being on a rate plan that bills you by the minute or being on a rate plan that bills you by the second.
Q: Why was it so important for you introduce per second billing (rate champion)?
A: It was important for us to make sure that we could also address the market segment that had a calling pattern that would be better off having ‘per second billing’ and very low sms prices. We now have smsing of 88 shillings inclusive of VAT. This rate plan is designed so that if you have shorter conversations it is to your advantage or if you have conversations off peak, it’s definitely to your advantage all the way through. So it will appeal to some people that have that system in their calling pattern. Where as other people that predominantly have longer calls during peak hours would be better off on the whole market being on our ‘cash and talk’. So, we cater for two different segments here and it might be confusing to people but, we will interview the people about their expected call pattern and then we will, guide them through which of our two plans are the most advantageous for them. And they are free to change their pattern once a month free of charge.
Q: All this sounds like a costly exercise. How have these costs matched up to the benefits received to date?
A: I have persuaded the owners that this is a sound investment. We don’t simply look at the calendar year 2003. We look further ahead. If people are in this for the quick money, then they shouldn’t go into mobile communications. It costs money to earn money and heavy investment is necessary. The return is coming down the road and for Celtel all the returns and all the proceeds will be going back into society. They will be going back into the network and into social commitment. We don’t pay a dividend and we don’t foresee to pay dividends in many years to come.