Tuesday, December 2, 2008

Zain: Wonderfully poised

The entry of Zain into The Ghanaian telecom market via acquistion of majority stake (75%) in Western TeleSystems (Westel) at around the same period Globacom obtained the a mobile License has created real competition and a breath of anticipation about our telecom industry.

This post seeks to explore the 'wonderful' world of Zain, who they are, what they offer and my opinion of a startegy that could help them in their quest to capture market share.

Zain operates in the Middle East and Africa, and until recently operated under different brand names (Celtel in most of Africa) now consolidated under the Zain brand. Zain is presently in 14
African countries and in Ghana, Zain will operate both a 3G mobile service and fixed services which they inherited form their acquistion of Westel.

So what will they offer? Let us answer this question by assessing Core Services, Vaued Added Services, Data Services they provide in their other operations.

Core Services

I have garnered from blogs in East Africa that Zain has good service quality. However this is not a guarantee the same will happen in Ghana. This is because on the strategy front whereas in Kenya they are engaged in a price war they have stated categorically the approach in Ghana will be different.

Phillip Sowah, Country Manager, Zain Ghana, said
......... Zain will not engage in any price war since call rates were already low in Ghana adding that the company will not oversubscribe its network.

Their 'One Network' concept also offers frequent travellers considerable cost savings by paying the same price for calls on Zain irrespective of the country you are in. I believe in countries they do not have operations a more traditional roaming agreement will exist.

Zain has stated that it will cover about 85% of the country from
North to South by following the road network. If they can deliver on call quality, they will win customers. OneTouch/Vodafone and MTN the biggest operators have serious quality issues . In area of call tariff prices I will believe they will price competitively.

Valued Added Services.

This is the area in whicn things get really interesting. Zain seem to enjoy differentiating their brand through Valued Added Services (VAS). One really notable focus of the company seems to be in micropayments/mobile payment market.

Their first attempt into this market in Kenya under partnership branded 'Sokotele' to challenege the mighty Safaricom's MPESA failed. They have decided to start another solo service called Zap, a Money Transfer service. Zap it seems will be rolled out across all their countries of operation but I do not know if they will offer it in Ghana.

The remittance and microbanking, mobile banking area is an interesting space and any Mobile Network Operator (MNO) which succeds in this area will improve their Average Revenue Per User (ARPU) signficantly. In other countries especially the Middle East, information services (Restaurant info, Hsopital Info) are also offered but they have more structured infrastructure than Ghana.

Data Services

My favorite area. Zain offers data access through GPRS/EDGE (where is the 3G ) in Kenya.In Ghana I do not know if only GPRS/EDGE or also 3G data access will be available.Anyway reasonable fixed monthly data plans or even a reasonable pay-as-you go option will gain them customers (Me Me Me!!!).

What Strategy to use ?

This is what I think.

a. Focus on getting new and prospective phone owners, they have less allegiance to any network. Capture existing market share by selling your message of better network quality and then actually proving it as they have done in Kenya. This should gain you the mass subscription you need to survive.

b. Improve your ARPU above the average by delivering VAS especailly in information services. Most people will pay for SMS info services which provide them with relevant timely information. Sports Updates, job opportunities, get creative.

c. The Ultimate. Look to the future. High speed access must be leveraged to build Ghana's future network. Don't make the mistake MTN made by offering your data services at premium rates. Focus on the 18-28 demomographic. This demographic is still looking for an affordable always on option to engage in the social media era of the web. Be the 'Web 2.0' telecom network by offering affordable monthly plans. Don't go the Wireless Office route go the "Youtube,Facebook,Skpe,Twitter" 24/7 route.

There are several technology start ups in Ghana who are building web apps and bsuinessess which require regularly decent access to the internet. 3G mobile access would be perfect for such start ups and they will become evangelists for your network (Hint: Klustrs.com. Full Disclosure, I am a co-founder of Klustrs.com).

I personally believe Zain can deliver on their promise and are ready for business. Why?See their brilliant pre-registration campaign. Brilliant move on two levels:

1. Build a database of your users even before they make their first call on your network. You can even assess the number of people willing to move from your competitors and which competitor's users are easier picking and focus on bringing them to your network.

2. Make people know you care about them. Gving people their preferred number without any premium services fee or 'knowing someone' is an excellent way to do this.

What to know how much impact it makes. Read David Ajao's article and the most interesting thing is not the article but the comments. 1,296 people commented at the time I checked the blog, mostly talking about getting their number and asking for help registering, 1,296!. He actually shut down comments an did a follow up post.

Since a christmas launch seems likely, especially since we all know how jammed the
existing networks get during the christmas period, I say WONDERFUL!!