Uganda regulator confirms Smile Communications license

The Uganda Communications Commission has awarded PIP and PSP licenses to Smile Communications of South Africa, confirmed UCC executive director Patrick Masambu.

"All I can tell you is that Smile intends to provide service at low cost with new technology," Masambu said.

Smile Communications now brings the number of PIPs (public infrastructure providers) in Uganda to 21 and the number of PSPs (public service providers) to 31. Many of these providers are not operational, despite holding licenses.

E-mails to Smile Communications went unanswered, and it is not clear if the company, led by former MTN group director Irene Charnely, intends to launch mobile phone service as part of its entry into Uganda. Earlier media reports have stated that the company plans to provide affordable communications to the poor.

Smile's acquisition of the two Ugandan licences launches the company's plans to extend its influence outside of South Africa.

African telecom operators are currently looking to expand their footprints on the continent and are seeking to tap rural markets. Most of these companies are using a model of affordable communications access, which, if successful, would bring in millions of potential customers.

Smile has tested a tactic of giving customers their own telephone numbers and voice message boxes, regardless of whether own handsets. The company provides customers with secure PINs (personal identification numbers) to use on any Smile Communications phone.

In its home market of South Africa, the company operates through agents, who provide mobile handsets in street kiosks, stalls and pay phones. Once customers log in with their PINs, they can make low-cost calls, access their contact lists and operate a voice mailbox with free message retrieval.

Having a personal number means the customer can be contacted directly, though the incoming caller will need to leave a voice message, unless the user logs on to a Smile phone at a prearranged time to answer the call.

Customers' airtime balance is always visible, and calls are charged per second, with the fee deducted from their prepaid airtime balance.

The agents also sell handsets to customers who can afford them. Those phones can be shared by several people, with each user entering a PIN number to access his or her airtime.

Smile Communications is owned by a consortium of Saudi Arabian investors, Charnely, and South Africans Paul Savage and Sharron Vanessa Naidoo. The three South Africans own 21 percent of the company, while 79 percent is held by Al-Nahla Technology.