Orange Uganda undercuts competitors as mobile Net picks up

Following the shift last year away from satellite connectivity to cheaper and faster fiber optics, Orange Uganda, the newest among the major GSM operators in the country, has slashed monthly charges for its mobile Internet offering, setting the stage for a price war.

When Orange launched its service in October, it was powered by a third generation (3G) platform, wireless modems were retailing at about US$179.4 while the monthly service was pegged at about $46 for 1GB capacity. Now, for about $25, Orange is offering the same capacity to users.

"Orange is billed as the number one provider of broadband Internet services in Europe and is out to replicate its success in Africa," Phillipe Luxcey, the Orange Uganda chief executive said at a press conference to announce the new rates.

The market average for the same capacity is $50 and Orange's move, according to watchers of the sector, could set off a battle over pricing, similar to what happened in the mobile telephony segment when the market was opened up to new competition in 2006.

Orange Uganda, a subsidiary of France Telecom Group, is connected to The East African Sub-marine Marine Cable System (TEAMS) -- one of two undersea fiber-optic cables that landed and went live on the Eastern Africa coast last year.

Orange's reduced-price offer now requires a user to buy a Universal Serial Bus (USB) dongle or mobile modem that costs about $102 with free connectivity for one month.