The death of a star

“star taffa,” goes a local saying, a movie star never dies in their own movie. But these are matters of hollywood. In business, a star dies. Nakumatt died. UTL has been in ICU, until government tapped into tax payers’ deep pockets and wrote off over Ugx. 200bn. Vodafone too is not so lucky. it came with a bang deploying a lot of better solutions than the telecommunications market was offering. Unfortunately, it has died in its own movie.

In Astronomy, a lot is talked about stars. But one of the most commonly talked about facts is the death of a star. Several billion years after its life starts, a star will die. How the star dies, however, depends on what type of star it is.

Vodafone came to Uganda in 2014 when British telecom company Vodafone signed a deal with broadband company, Afrimax, to provide voice and data services under the Vodafone Uganda brand. At that time, analysts predicted that the entry of Vodafone Uganda would lead to a spike in competition with existing telecoms MTN, Airtel, Smart, Smile and Orange resulting in price reductions. And so, it was.

Four years down the road, the telecom is struggling to stay afloat and retain its customers as a result of poor service delivery, low internet speeds, and complete lack of connectivity in some areas. A company which had monthly sales of about Ugx1.5bn by the end of 2015, it is now struggling to realise sales of a mere Ugx150m per month in 2018.

What went wrong?

In marketing, there is talk of a market entry strategy which is the planned method of delivering goods or services to a new target market and distributing them there while competing with the existing market players. There isn’t much to be talked of the strategy that Vodafone used to enter the Ugandan market which was already was already saturated with offers from companies like MTN, Airtel and others.

Vodafone decided to enter the market by offering unlimited 4G internet packages to customers. These offers won hearts of many data enthusiasts and all was well until the very striking offers received revisions that were rather not received positively followed by a series of recurrent revisions. After these bundles were finally scrapped off in 2016 without proper communication to the customers, the company started launching various offers which many experts saw straight away to be desperate attempts to stay afloat.

In their phase two strategy, the telecom launched portable MiFi routers. These debuted at Ugx 169,000 and came with unlimited internet for one month. However, the unlimited data was 30GB at 2MBps and after that, the speeds are caped to 512Kbps. Regarding the MiFi’s however, the company offered confusing data offers where buying a new device was cheaper than renewing your subscription among others.

Vodafone was perhaps enjoying the greatest share of its market among campus students who were the early adopters. This market was also however jeopardized late last year when the telecom fired all its university brand ambassadors without pay. Vodafone had over 150 university brand ambassadors who were dismissed without pay.

Unstable Network

Towards the end of December 2017 to date, Vodafone has been faced with severe outages some of which have acted as a catalyst for the exit allegations. The outages are attributed to tower operators Eaton Towers, whose arrears Vodafone allegedly hasn’t cleared. These are said to amount to over Ugx2 billion accumulated over a period of two years. It was later established that before Christmas over 35 of Vodafone masts were switched off for non-payment. According to sources, Vodafone licensing fees to Uganda Communications Commission (UCC) have also not to have been paid as well as those of other suppliers like advertising agencies and landlords.

In an official statement on its Facebook Page, the telecom apologized to its customers for deterioration in quality of service for the last several weeks but assured customers of restoration of service without giving specific timelines and to date these assurances haven’t been fulfilled.

Vodafone customers especially those outside Kampala have not had connectivity since 2018 began. To make matters worse, there is no where to complain as customer service outlets have been shut down in many places all over the country. The closed outlets include those at Metroplex Shopping Mall, Victoria Mall Entebbe and Freedom City and according to officials in the sales department, the Crown House shop is closing end of this month.

The future

The way forward for Vodafone Uganda is one mired with quagmire as the telecom has already started disposing off company assets. On January 9 2018, Christine Sekyana the Human Resource and Administration manager at Vodafone, sent an email to all employees under the title, Disposal of Assets asking those interested in buying assets to show interest. The situation is so dire that speculation says the telecom may vacate the market before the end of February.

In other news however, Vodafone Uganda could soon be sold to a new company-Dei Technologies International (DTIL), a technology arm of Dei Group of Companies International Limited (DGCIL). DTIL tendered in its letter of intention to buy Vodafone Uganda Limited on February 1, 2018. The letter was addressed to the Chief Executive Officer of Vodafone Uganda Limited. DTIL intends to acquire Vodafone including its offices, warehouses, shops, equipment, its brand identity and logo as well as customer lists

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