Average Revenue Per User The average revenue per user (ARPU) is the total revenue divided by the number of subscribers. ARPU have lately experienced widespread declines because of increased penetration into lower income segments that usually exhibit modest consumptions patters. The operator MTN constitutes a good example in Table 17. Some operators see a slowdown in consumer spending among existing subscribers and/ or are experiencing declining growth, partly because first-time subscribers are becoming fewer. Many seem to feel pressure due to multiple SIM behaviour and rotational churn. This means that the value of existing subscribers has become critical and retaining valuable subscribers is now imperative to the future success of an operator. East African operators are therefore trying to find ways to prevent churn and increase the revenue through loyalty enhancement, usually by selling value added services (such as entertainment) and thereby increase ARPU. This is mostly done in close partnerships with a third party content services provider. Table 17: Quarterly % change, Dec 2008–Mar 2009 Subscriber numbers
ARPU
Rwanda
15%
–33%
Uganda
13%
–19%
Source: MTN 2009
Another way for operators to compensate for the declining voice ARPU is through increased data traffic. With an internet penetration in the region between 1% and 9% (ITU 2009a), there is a significant opportunity for mobile operators to become ISPs and offer data services to its subscribers. The operator are looking for innovative applications that brings up the ARPU, while development oriented developers are trying to create applications that create an extra value and economic growth for the end-user. This equation is not to easy to solve.
Customer service and consumer rights Customer service in East Africa is generally non-existent. This might change with time as competition increases and when/if number portability is introduced. Number portability enable the users to switch their operator without having to change their mobile phone number and thereby avoid the risk to loose contact with business associates, friends, family, etc..It is also considered a key factor in enhancing competition as quality of service is likely to improve and costs will continue to fall. While regulators try to make it a reality, there is a resistance from the bigger players who feel threaten by smaller players and new entrants. However, as for now customer service is moderate to say the least. Long waiting times, jammed toll free numbers, insufficient and incorrect replies etc. Typical issues include billing complaints like airtime never loaded or unclear tariffs. Poor quality of service include undelivered SMS, poor voice quality and dropped calls; high failure rates of hardware such as on promotional mobile phones. Unsolicited messages is another commonly received complaint. It is in situations like these operators like Safaricom, Zain, MTN and Vodacom get the nicknames Suffaricom, $afcom, Sufferingcon, Zait, Pain , Most Troubled Network and Voodocon. When providing low-increment services in a prepaid environment, back-office, billing and customer service must work extremely well. “It is not good business if a $2 transaction billed incorrectly leads to a $10 customer service call.” (Cellular-news 2010a). Further, few customers know about their rights and obligations resulting in a situation where end-users do not get value for money from operators and service provid-
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