1. Sonatel, Senegal
- Company Overview, situation and products
Sonatel is one of the biggest telecommunication
companies in Senegal. It offers a variety of telephony
and Internet services to the public. Sonatel maintains
a full digital network which supports Internet
access of highest quality such as broadband with
bandwidth up to 310 megabits per second. The company
is situated in sub-Saharan Africa yet its services
rival those offered by companies in South Africa.
The span and width of the organization is so large
that Sonatel is considered to be the national
telecommunications operator in Senegal. The company
develops competence through hiring private individuals,
professionals and companies. The modern network
integrated has been set up with the view to broadcast
digitized loops of transmission and international
connections by underwater cables with optical
fiber.
Sonatel is also the first gateway to internet
and telephony services in Senegal as it has a
range of services such as Internet access, formation
and creation through a subsidiary group company
Sonatel Multimedia. The company has also introduced
telecenters in 1992 which act as supporting centers
to delivery of telephony services. The various
services offered at the telecenters include telephony,
fax, photocopies, media, minitel, secretariat
and internet services. Media basically comprise
of broadcasting services in collaboration with
the local FM Radio stations where the people can
call to inquire about the broadcast programs.
2. Product Potential
Senegal's market before the regulatory policy
in 1997, have had a weak infrastructure that support
basic telecommunication services. However, as
the country has developed through trade associations
such as the European Union which opened up Senegal
to the new market. As a result, most of the multinational
companies have set up base in Senegal for due
to the cheap labor and low cost of operation.
Due to this reason, there has been an increase
in the demand for telecommunication products and
services for distribution, retailing and communication
purposes.
Not only has this but Senegal also been introduced
to the new concept of e-business so that many
of the foreign companies have initiated e-commerce
within Senegal introducing a new trend in business
strategies. Combined both of these new trade mechanisms
have generated a high demand for consumer and
business oriented demand for telecommunication
and IT services which motivated the government
to take concrete steps towards the industry.
3. Business operating policy
The company has hierarchical organization comprising
of directorate general, assistant general director
for 9 subsidiary companies. There are also 7 operational
directors for different departments and for its
technical services and centers. To operate these
centers and the company the company has hired
more than 12000 people at the call centers and
1300 staffs for its offices. The company conducts
surveys of users and usage requirement before
it integrate into its services offering at the
telecenters. It has been concluded that the telecenters
are used equally by men and women with a slight
emphasis on women in the cities while with more
men in the rural areas. The basic premise for
setting a network that is spread out far and wide
is to encourage Senegalese business entities to
develop even in the remotest areas of the country.
Since the company is dependent on its branches
for efficient operation and the users' affordability,
from time to time the company revises its tariffs
to accommodate for every level of users from individual
private users to businessmen and organizations
as well as at the telecenters.
Recently, one of the most important announcements
had been the reduction in international tariffs
by 33% and 50% in access setups as well as 39%
in monthly charges. This strategic policy has
allowed Sonatel to increase its popularity in
Senegal in which it already has monopoly.
4. Financial and economic structures
Sonatel in the past has thrived in the Senegal
business environment due to the fact that the
country is one of the most politically stable
in the country. Senegal acts as a gateway to West
African countries and trade to the area. It is
heavily dependent on agriculture but the recent
opening up of the country to foreign investors
has increased investment and business opportunities.
This is why one observes that the country has
a constant annual GDP growth of 5% approximately
and the inflation rate of 2% during the 1990s
(Country Commercial Guide 1999). Backed by the
world organizations such as IMF, World Bank and
other donors in the world Senegal has been able
to maintain a good economic infrastructure for
businesses such as curbing imports restrictions,
reduced tariffs, liberalization of labor market
and privatizing state-owned organizations (Country
Commercial Guide 1999).
5. Marketing policy
The creation of an independent telecommunication
regulatory agency policy has strongly advocated
the privatization of the industry in 1997. Sonatel's
basic services such as long distance telephony
have had a great change due to this regulation.
Since the main sales is generated from the scheduled
usage of telecommunication operation for long
distance, a change in the tariffs has altered
the way the company operate and carry out its
business strategies. In 2004 finally the Sonatel
adapts itself to the new liberal market environment
which is fully competitive and free to serve the
public. The first marketing tactic had been to
target the international telecommunication users
by cutting down on the tariff and integrating
internet services which although have high cost
of backbone set up but its returns have been immense.
The new structure decreased rates from 20 to 40%
to the general public especially access by universities
and schools. The decrease in rates has basically
alleviated free market competition for the existing
or new firms against Sonatel. But most importantly,
it has been implemented with the aim to provide
services a lower rate for a high demand market.
The number of cellular subscribers has increased
from 4000 in 1996 to 300,000 in 2004. This figure
alone indicate that the Senegal market is ready
for a change in the telecommunication and information
technological structure of the company (Sonatel,
the telephone operator announces" 2004).
The launch of the new telephone director 2004
have also improved the characteristics of the
business and classified information in the various
sectors in a more visible medium. Thus it could
be seen that Sonatel has a parallel policy of
serving both the national and the international
service users. For this reason it has had great
appeal to the Senegalese.
6. Trading policy and competition market
One of the most important aspects of the business
for taking the responsibility to develop the telecommunication
infrastructure had been to attract foreign investors.
Sonatel's infrastructure has proved ideal for
foreign companies such as France Telecom has bought
stakes in Sonatel due to this fact. Not only the
investment in the infrastructure has attracted
foreign companies but it has also returned the
initial investment already. Furthermore, this
tactic has helped curb competition from the local
market and enable Sonatel to have the monopolistic
position within the firm.
By eliminating competition backed by government
support, Sonatel instead is able to concentrate
on improving services and product diversity for
the general public which perhaps may not be able
to subscribe to telecommunication services had
they been offered by other companies with high
prices due to high cost of association.
7. Political and cultural foundations
As mentioned earlier the political and economic
environment in Senegal is stable due to the highly
regulated infrastructure of the country. Interventions
from the international organizations have managed
to curb the country from political and economical
malaise. Not only has this but the government
been making keen efforts in establishing conditions
for sustained growth and prosperity. This would
increase the country's potential to the international
market.
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