Air­tel Zam­bia praised for Mo­bile In­ter­net mar­ket price dis­rup­tion

Zambian Business Times - - FRONT PAGE -

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.

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