Wednesday, November 12, 2014

K2 TELECOM, STRATEGIZE OR DIE OUT


I must admit that I was compelled to write this after reading an article on dignited.com about how Smart Telecom is the new Warid based on their unrivaled data packages.

Every company or person that plans to enter into a new market has to come with a well executable strategy on how to identify potential clients and eventually woe them to use their product or service. The greatest battle that this country has ever witnessed was probably between these two giant multinational corporations of Coca-Cola and Pepsi Cola. I would have detailed that more only that I was way too young to know how Coca cola a new entrant managed to take over the soft drink market.

As the management at Pepsi was still puzzled, wondering how they lost their market share, another similar war was happening somewhere else. This time in the telecommunication sector (mobile to be specific). Before its entrance, MTN had realized that people need affordable handsets and cheap call rates. And that’s what they capitalized on as opposed to Celtel who charged in dollars for their handsets plus both for the incoming and outgoing calls. This rendered Celtel a preserve for the super-rich.

Though MTN marketed itself as an affordable network, still their tariffs were way too high for an ordinary Ugandan. Perhaps that is why when Uganda Telecom ventured into mobile under MANGO didn't look for another marketing strategy other than Cheap and affordable. They further went ahead to say that MANGO actually stood for Most Affordable Network Grown Over Uganda. For the very first time, a Ush 4000 and Ush 2000 airtime voucher was introduced on the market in this country, service fee was not a requirement and MANGO JAZZ- a profile that offered as many free minutes at only Ush 1000 for on net calls was introduced. This strategy paid off as many young people found UTL a refugee from the dubious charges of Celtel and MTN.

Cheap and affordable must be the only language to reach out and breakthrough because Warid also capitalized on the same strategy with Mega Bonus - a version of mango Jazz to grow its subscription. When Orange realized that there is no way it’s going to come out alive from this cut throat competition over the voice platform, they decided to market cheap data- a platform that had been vehemently ignored by these three market leaders hence surviving up today.

Smart telecom entered the already congested market through the acquisition of Smile, a company that was on its death bed. Like Orange Telecom, they are vigorously reaching out to us with very cheap data bundles never witness in this country before as illustrated here http://www.dignited.com/10722/smart-telecom-uganda-internet-bundles-show-new-warid-data-services/. And because of them I am able to save almost 90% of my expenses on data. If they continue like this, am more than persuaded to believe that they will have a half of the data market in a year's time.

In the last five chapters, I have been illustrating the strategies, the known telecoms have applied to be relevant, grow subscription and survive in this ruthless market. Among all, I have found none that K2 is embracing. It should be noted that China is growing because it is meeting peoples' desire for cheap goods, other than that I have a question to the K2 management and I hope someone will recommend or forward this article to them.

K2, what is your strategy for staying relevant, growing subscription and surviving in this market where the law of the jungle is master?