TECHNOLOGY TIMES Analysis
Lagos. July 17, 2013: South Africa’s Smile Communications Limited’s launch of its broadband service in Ibadan, the third largest city in West Africa is creating a radical new strategy among new entrants with eyes on Nigeria’s telecoms market stakes.
The company had earlier this year announced the launch of what it prides as its “brand-new, high-speed, high-quality 4G LTE network” to deliver high speed Internet connection in Ibadan, the third largest city in Africa and largest in West Africa.
“Using state-of-the-art 4G LTE technology and an innovative approach, Smile is connecting Nigerians to the internet at speeds never experienced before”, the company announced at the time.
The Nigeria launch complements ongoing African foray by the telecoms company targeting the delivery of broadband connection to underserved communities and has seen the company switch on service in some African operations.
Smile says it is on a mission to “provide affordable, high quality and easy to use broadband access and communication services to everyone across Africa, using low cost and innovative business models and the latest technologies.”
Since it was founded in 2007 and incorporated in Mauritius, Smile has set up subsidiaries in Tanzania, Uganda, the Democratic Republic of Congo (DRC) and Nigeria and an associated company in South Africa.
In all of its markets, Smile hopes to become a pioneer in harnessing the latest technologies, such as 4G LTE to accelerate broadband access and penetration.
It is a Herculean task for a new entrant and Smile may have learnt this from the experience of the last few years of its Nigerian foray when albeit it has managed to secure a unified service licence as well as some lucrative frequency spectrum.
Smile’s decision to use Ibadan as its launch pad in Nigeria may not be unconnected with hurdles faced by the new entrant in securing favourable interconnect terms with the bigger telecoms networks that dominate the vibrant market.
At launch, the broadband company says that the people of Ibadan now have something to smile about as it is offering “high-speed internet that is significantly faster than the standard 256Kbps and 516Kbps offered by most mobile broadband providers.”
It says its service ensures a reliable connection with less latency and buffering, enabling a quality experience of real-time streaming of videos and music.
Its Ibadan rollout will deliver high speed Internet connection to several parts of the city including Challenge, Felele, Orita, Ring Road, Kongi, Bodija, Old Gbagi, University of Ibadan, among several locations across the city.
Though the groundbreaking 4G LTE technology offers promises of high-speed data service, it will also see users shelling appropriately-priced bundle plans as follows for Smile services: 500MB – N1,500; 1GB- N1,800; 3GB- N4,000; 10GB- N10,000;20GB- N19,000 and 50GB-N45,000
Irene Charnley, a former Director of South Africa’s MTN Group is founder and Chief Executive Officer of Smile Telecoms Holdings Ltd, believe the company is on a mission.
“Irene is a social entrepreneur who is also a widely respected telecoms visionary who was instrumental in transforming MTN into one of the most respected telecommunications players in the EMEA region”, according to a company statement.
Smile says its entire business philosophy is centred on bridging the digital divide and enriching the lives of individuals and households, small micro and medium sized businesses (SMMEs), as well as institutions including schools and universities.
This has been the driving philosophy of the Smile business model since it Since the launched its first network in Uganda in 2009.
Smile said at the beginning of the year that its “business model has since evolved to meet its customer needs and to adapt to the latest technological development. In 2012, Smile Tanzania rolled out Africa’s first commercial 4G LTE broadband services. Smile’s commercial 4G LTE broadband services are now also available in Uganda and Nigeria and soon to be launched in the DRC, giving its customers access to ultra-high-speed internet. 4G LTE is the future platform for all online and voice communication and is the fastest technology currently available.”
Smile packs a mix of shareholders that include Al-Nahla Technology Company, owned by the Al-Nahla Group, a conglomerate family business and ranked as one of the largest landowners in the Kingdom of Saudi Arabia, owning 50 million square metres of land across the Kingdom.
Al-Nahla is a major shareholder in Riyad Bank, the second-largest listed entity in Saudi Arabia and is represented on its Board of Directors while also being a key shareholder of Etihad Atheeb, the second fixed-line operator in Saudi Arabia.
Atheeb Trading Company, a wholly-owned Saudi Arabian company, operating across the Middle East and in the wider region also owns shares in Smile and also has stakes in ICT, industrial construction, transportation, financial services and real estate.
Capitalworks, a leading independent alternative asset manager concentrating on sub-Saharan Africa and managing more than $250 million for a diverse range of domestic and international investors also own stakes in the telecoms company.
Verene, South African, black-empowered company with social entrepreneurs that holds investments in the ICT sector who are focused on widening access to communications to the underserved masses.