TANZANIA tasted digital mobile phone services in the early 1990s. The company giving the services was called Tritel. It wound up services and went into oblivion.
The most memorable personality of that phone company was its pricing policy. People paid through their noses to get connected. One pitiful client I remember loved to show off his phone.
The trader wore suspenders most of the time. He would walk into a bar in the evening with two things in front of him: a saggy potbelly and a square mobile phone lookin’ like an oversize bar of soap.
The Tritel phone would be the most valuable item in his possession, setting him apart from the rest of the people in bar who either had an analogue cellular Mobitel phone or had no phone at all.
Sitting on a metal chair in a bar, he would pull a thin, long antenna from the square phone, fiddle with the buttons for a little while and make a call to someone as he leaned against the chair. The correct description of this man is that he was a very pompous rich man.
Tritel catered for fools like this man. People who bought phones to attract as much attention to themselves as they could in the sky rise corridors, in the conference halls and in the bars, especially the attention of hookers and other men’s wives.
At that time, one would spend1.5 m/- to get connected to a Tritel phone. A company called Mobitel was the first to come onto the mobile phone market with their analogue switching system. They were more widespread than Tritel and chose pricing as their fighting edge.
The price war which followed saw connection fees droping to as low as 150,000/- for Mobitel users while Tritel dropped from 1.5 m/- to somewhere in the vicinity of 500,000/- if I remember correctly. Tritel wound up business.
While there may have been other reasons for this winding up, most of us saw Tritel as a business which failed largely because of its unreasonable pricing policy.
And very very unfortunately, I am finding out that Tritel’s winding up did not teach some mobile phone companies any lesson at all.
We have in Tanzania right at this moment companies with very weird pricing policies, with the worst part being inconsistency. With these companies, it is not possible for any customer to plan a budget based on any stable pricing policy. I don’t think it makes any business sense to wake up every morning not knowing what the price is going to be for whatever mobile phone one is using.
One morning a company is charging 60 units of airtime at 500/-, implying that one unit costs Tsh8.33. The next morning, the same unit starts to be charged at Tsh. 13.33.
The question of surprise pricing is one side of the issue. The other side of this company’s lack of business scruples is that some of its clients are considered rich and are punished for it. For the rich guys using this network, one unit of airtime costs 20/-.
A client is punished for using this mobile phone company? What school of business did you guys go to? Is that what they teach in South Africa? To be inconsistent? This inconsistency is going to eat you guys up. Take my word. You better return that genie back in the bottle.
Mobitel evolved to become Tigo. I dare to say they are very consistent with their pricing, and they seem to still be using pricing as a fighting tool. I personally do not wish to see any of the existing mobile phone companies banished. I want to see all of you stay because competition improves services.
To stay afloat, I believe, you need to go back to Economics 101 and your intro to Marketing. They will warn you about the problem you are bound to face with inconsistent pricing right at the beginning of the course.
It’s a good ambition to want to be the mobile phone company that leads Tanzania; but to do that you may want to check your pricing policy first.