Rwanda Utilities Regulatory Authority (RURA) has ordered Airtel Rwanda to stop a controversial advertising campaign that the telecommunications firm has been running for weeks.
The decision follows a complaint filed by MTN Rwanda – currently the leading telecom company in Rwanda with 59.8 per cent market share – alleging unfair competition against its rival network.
The ads in question generated mixed views. The ad uses brand colour, yellow, that represents MTN, and mobilises customers to leave their rival network.
One of the campaign posts features a photo in which one individual dressed in a ‘yellow’ T-shirt and denim jeans seemingly speaking on the phone and a rope tied around his waist is being pulled by someone from the back.
“Why stick to the wrong network?” one Twitter post by Airtel asks. “Now is the time to free yourself with #AirtelIsanzure.”
The regulator said it carried out analysis based on the elements of the ad and concluded that, although Airtel does not directly mention or refer to MTN, it was unfairly discrediting MTN’s reputation in the market.
By looking at the design, colour and the content of the advertisement, RURA said in a letter dated December 3, and addressed to MTN, that the ad might “unfairly discredit, disparage or attack” their rival.
It also found that the use of the statement “The Honest Network” in Airtel’s advertisement may mislead the consumers by taking their competitor as dishonest.
In a memo, the regulator said that MTN Rwanda Chief Executive had raised concerns over Airtel’s “comparative advertising”.
Comparative advertising is common in advanced markets like that of the US, and a case in point is PepsiCo’s Pepsi Challenge ad campaign that directly compares the taste of the beverage to its competitor Coca-Cola.
It is basically a tactic deployed by players in which a company’s product or service is presented as superior when compared to a competitor’s. It is something that big brands have mastered.
However, the Rwandan market has not really seen competing companies openly attack each other, making the ad draw mixed reactions.
Stop the ad
The regulator has directed Airtel to cease the campaign, saying the practice is prohibited by the regulation governing promotion by Telecommunication operators in the country.
The regulation says advertisement must not, unfairly, discredit, disparage or attack one or more products, services, advertisements, companies or entities, or exaggerate the nature or importance of competitive differences.
“No licensee shall imitate the slogans or illustrations of another advertiser in such a manner as to mislead the consumer,” it reads in part.
The same regulation requires that any company intending to carry out promotion of services or product must ensure that promotions are transparent, fair and truthful.
Based on the above facts and considerations, RURA asked Airtel to cease the advertisement, with immediate effect.
“We invited them and they agreed to amicably cease unfair competition,” Tony Kuramba, the Spokesperson of RURA told The New Times in a phone interview on Tuesday.
Kuramba said fair competition involves good advertisement and provision of good service, but “if someone tries to tarnish another brand reputation, it creates unfair competition.”
According to the regulator, non-compliance with the order will lead to other regulatory sanctions.
The regulation says failing to comply with any specific order or directive of the Regulatory Authority in relation to the concerned promotion, the licensee shall pay a maximum fine of Rwf5 million per day of its non-compliance.
Although widely practiced, comparative advertising is subject to strict laws in many markets. In the United States, companies may not engage in comparative advertising without being able to back up the claims that they make.
They must be able to prove their assertions of better quality, greater popularity, better value, and the like with facts, and may not engage in false statements or imagery that disparage a competitor.
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