Airtel Zambia praised for Mobile Internet market price disruption
AIRTEL Networks Zambia, a subsidiary of Bharti Airtel Group which is also the largest mobile phone operator in Zambia by revenue generation with a customer base of more than 4.9million as at 30 June 2017, has been praised by members of the general public for its disruption of the bundle pricing market. This follows the telecoms company launch of its revamped 4th Generation - 4G network. The disruption occurred on the day Airtel officially switched to 4G on December 19 last year.
The network upgrade entailed a customer offering of faster internet speeds, with the technology simply needing some of their customers to upgrade their SIM cards. Airtel Zambia splashed their offering by announcing a 1GB of data free to all those that upgraded their sim cards to 4G LTE, while it has also revamped its entire range of data bundles to coincide with the latest launch announcement.
The launch was coupled with a massive sales promotion dubbed ‘Chaopena Data’ meaning data is almost free to provide more volume benefit compared to what subscribers previously used to get at the same prices. This is what was described as price slashing which to an extent has gained the network its trusted brand name as the Zambian market saw all the major data and mobile internet players slash their prices in response.
The launched mobile internet and data bundles announced slashed prices on the market in December 2017 by almost 50%, something that the market has not seen in the many years of mobile internet services. Zambia has always grappled with relatively higher data and voice service charges by the MNO’s, a market serviced by only three companies, Airtel, MTN and government owned Zamtel. The market had historically been oligopolistically skewed to charging higher margins and less on driving volumes.
But the latest statistics released by MNO’s regulator, the Zambia Information and Communications Technology Authority - ZICTA shows that the number of active mobile subscriber base in Zambia has jumped from about 5.4million to about 13million by end of Q3:2017. This statistic alone shows that with market expansion, there is ample room to implement a volume driven model as opposed to a margin driven model. This is a part which Airtel may have taken advantage of while its competitors remained with a mindset of the era before 2010 when the entire Zambian active subscriber market was less than 5million people.
The ‘chaopena” campaign by Airtel has not only won it back some of its lost customers, but is also expected to be leveraged in terms of driving customer loyalty and enhance the ‘trusted brand’ proposition. This campaign from the comments on both social media and general public has won the company considerable market praise as they are at the forefront of delivering what most Zambians always know, that the data/mobile internet prices in Zambia were way off the mark and far more expensive even within the Southern Africa region.
The download speeds being witnessed on the Airtel 4G upgraded service has also provided stiff competition to niche internet service providers whose main offering was faster download speeds. The ISP sector will need to come up with more differentiated products and services that surpass the offerings that are being upgraded on the major MNO players to defend their market.
Communications Minister Brian Mushimba will be expected to announce the successful bidder for Zambia’s 4th converged telecoms operator which is expected to brew competition and diverse product offering in Telecoms market. This Zambian telecoms market is very lucrative and is currently valued at USD437 million in revenues.
The strategic move by Airtel Zambia has been described as ‘positive market disruption’ is one of the classical example of the benefits of a capitalistic competitive market. It is expected that as Zambia’s youthful population – the millennials - continues to increase, more and more young people are entering the adult employment market (formal or informal) who will further lead to growth in the size of the market. With a sizable market and growing middle class, the market is expected to have further room for driving volume and low margin business models as opposed to the erstwhile high margin and low volume business model.