Global Insight Perspective | |
Significance | This follows the UCC introduction in June of a unified licensing regime, following the end of the fixed-line exclusivity of the fixed-line operators, UTL and MTN. |
Implications | Warid Telecom will enter the market in competition with fixed-line operators UTL and MTN, which had 108,140 fixed-lines in service by 30 June 2006, and against mobile operators MTN, UTL and Celtel which between them had 2.009 million subscribers as at 30 June (source: UCC). |
Outlook | Warid Telecom plans to offer mobile services under the scope of its unified licence, indicating that it will invest some US$200 million, with the aim to have an initial capacity of 1.5 million subscribers rising to some four million subscribers within three to five years. |
Warid Telecom will enter the Ugandan market as it enters a new phase of liberalisation. The company’s licence initially runs for one year under the transition period to the new licensing regime, but will be extended until 2010, at which point the market will be fully liberalised. In January 2005, the Uganda Communications Commission (UCC) announced, as part of a telecoms policy review, that within 12 months from the end of the exclusivity period on 25 July 2005, it intended to issue a third national “unified” operator’s licence and, furthermore, that it will issue an unspecified number of “area” unified licences in under-served areas from July 2006, culminating in the complete liberalisation of the sector from July 2010 (see Uganda: 10 January 2005: Ugandan Regulator to Issue Third National Operator's Licence).
In June 2006, the regulator issued new unified licensing guidelines under which the incumbent fixed-line operator, Uganda Telecommunications Ltd (UTL), and the second national carrier, MTN Uganda, hold the first two of these “unified” licences. The third licence will break the current duopoly. These three licence-holders will be permitted to establish and operate national infrastructure until 2010, at which point the market is to be fully liberalised. Furthermore, from July 2006, the UCC also intended to grant unified licences to what it calls “area” licencees, for those areas in which the national operators have been unable to roll out infrastructure or services (see Uganda: 21 June 2006: UCC Issues Unified Licensing Guidelines in Uganda).
Outlook and Implications
Warid Telecom International, based in Abu Dhabi, has embarked on a phase of international expansion into developing telecom markets and in the last two years has won new operating licences in Pakistan, Bangladesh, Congo and now in Uganda.
- Pakistan: Warid entered the Pakistani market at the beginning of 2005 (see Pakistan: 16 May 2005: Al-Warid Launches GSM Network), and is investing over US$500 million to launch its operations in the market. Since the launch of GSM mobile services in Pakistan in May 2005, Warid has been the fastest-growing mobile operator in that country. By September 2006, the operator had more than 5 million subscribers—the third-largest mobile operator in Pakistan.
- Bangladesh: Warid Telecom won Bangladesh's sixth mobile (GSM) licence in December last year (see Bangladesh: 5 December 2005 Warid Granted Mobile Licence in Bangladesh). The company beat a bid from the Jordanian firm, Umniah, in a 'beauty contest' process. The licence has been assigned a flat fee of US$89 million.
- Congo (Brazzaville): Warid Telecom International entered into a joint venture with the fixed-line incumbent of Congo, the Société Des Télécommunication du Congo (Sotelco) in August this year (see Congo: 10 August 2006: Warid Telecom International Signs JV Agreement to Enter Congolese Telecom Market). Warid Telecom International signed the joint-venture agreement with Sotelco to offer mobile and other telecommunication services in the country, said Warid CEO (chief executive officer), Hamid Farooq, in a company press release. The joint-venture company, entitled Warid Congo SA, will be granted licences to operate mobile, fixed-line, wireless local loop, WiMAX, and fibre-optic services and plans initially to offer services in Brazzaville (the capital) and Pointe Noire.