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Rebranding, cheaper offers spur Sudani growth
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Apr 5, 2011 - 7:36:14 AM

Rebranding, cheaper offers spur Sudani growth

By Deepa Babington

KHARTOUM (Reuters) - Sudani, the mobile phone unit of Sudan's state-owned Sudatel telecoms company, is expanding its subscriber base and grabbing market share thanks to a rebranding campaign and simple offers, its CEO said.

Sudani is one of three major players in Sudan's lucrative mobile phone market of about 18 million subscribers, which has enjoyed a boom in recent years despite U.S. sanctions that have deterred investment in other sectors.

The company, which entered the market in 2006, now has about 6 million subscribers, up from about 5.8 million at the end of 2010, chief executive Emmanuel Hamez told Reuters.

After sluggish growth from 2007-09, the company has seen rapid expansion by switching to new technology and overhauling its image with an aggressive marketing campaign, new customer care centers and glossy packaging for SIM cards, he said.

"Sudatel is the incumbent operator so it has the image of a grandmother, you know -- an old organisation, a little bit dusty, not able to compete. So this is exactly what we do not want to people to believe," Hamez said in an interview at the company's glass and steel high-rise building in Khartoum.

"We have tried to refresh the image of the company ... And we are starting to get the fruits of this work."

Posters of gleaming green, blue and white Sudani customer centers in Hamez's office and giant billboards along Khartoum's dusty streets point to Sudani's efforts to revamp its image.

The company has also used cheap, easy to understand offers -- an hour of phone and Internet services for 1 Sudanese pound at the lower end of the market and 50 Sudanese pounds for a month of phone and Internet at the top end -- to draw customers away from rivals Zain of Kuwait and South Africa group MTN, he said.

"From the end of 2010 to now we have been growing very fast but I think we are growing very fast because we are stealing market share," he said.

"Now the market is starting to be saturated ... We are sharing the same base and the game is to win market share against the competitor so there is a big competition fight."

As a result, the days of double-digit revenue growth in the voice segment of the market are over, he said. Internet and data services via mobile phones and dongles continue to grow off a small base, but do not promise a revenue boom for operators, he said.

"Now the market is mature, there is no big revolution coming," he said. "We will still grow but not at the rate we used to grow and we will consolidate market share."

Sudani is interested in expanding in the country's south, which will become Africa's newest nation in July after voting to secede from the north, though virtually everything, including whether a new mobile licence will be required, is unclear and up for negotiation with the government at the moment, he said.

"It has to make business sense," Hamez said on Sudani's interest in the region.

Despite the lure of a relatively untapped market, south Sudan's lack of infrastructure, high costs, and risk of conflict pose major challenges to operators there. Adding to the uncertainty, Zain last month told Reuters the southern government had ordered telecom operators to suspend projects there until new rules for the sector are issued.

Sudatel's top executives are due to meet southern officials in the coming weeks, Hamez said. South Sudan accounts for less than 5 percent of Sudani's subscribers at present, he said.