[kictanet] Seacom goes live- wait for TEAMS

Sat Aug 1 20:00:48 EAT 2009

I think the allegations and language used on this list really discourage real informative comment.

For information the shareholders of the Teams cable, who are most of the telecom operators in Kenya, will own and manage the cable and will sell their capacity both wholesale and retail as they see fit. The GOK owns 20%.

The Seacom cable is owned by a separate set of shareholders and this info is publically available.

The Eassy cable will be owned by another group of shareholders including a number of African telecom operators. This info is also publically available.

Not one shareholder will want to price themselves out of the market and, as another commentator mentioned earlier, the first to market with competitive prices will gain the most.

I broke my silence on this subject a few days ago and I regret it now as mostly the comments have been somewhat impolite, to put it mildly. I will refrain in future.
Regards

Michael Joseph
CEO 
Safaricom Limited

BlackBerryÂ® powered by Safaricom

----- Original Message -----
From: kictanet-bounces+mjoseph=safaricom.co.ke at lists.kictanet.or.ke <kictanet-bounces+mjoseph=safaricom.co.ke at lists.kictanet.or.ke>
To: Michael Joseph
Cc: kictanet at lists.kictanet.or.ke <kictanet at lists.kictanet.or.ke>
Sent: Sat Aug 01 19:16:51 2009
Subject: Re: [kictanet] Seacom goes live- wait for TEAMS

Competition?

3 cables does NOT = competition.  

As Waudo mentioned elsewhere in his posts, the big boys and girls sitting on TEAMs board are the same ones on SEACOM, EASSy and most likely anything else likely to land in Mombasa in the near future.

Basically you are looking at a conducive\cartel environment for fixing prices - think of our oil industry. Yes you have competition in the name of Agip, Total, Caltex, etc but has that brought down prices for gas?

Probably am being paranoid but I am waiting for the case study where public good won over private profits...maybe it will happen in another 4 months as the PS said.  And when it happens it should  should not be the misleading by 1-5% price drops.  Ideally for the TEAMs 
(tax-payers) cable you should be asking for the less than 100USD per MB prices that have been floated around over the recent years. And that should be per month rates NOT the punitive per byte of download rates.

walu. 

--- On Sat, 8/1/09, Gakuru Alex <alexgakuru.lists at gmail.com> wrote:

> From: Gakuru Alex <alexgakuru.lists at gmail.com>
> Subject: Re: [kictanet] Seacom goes live- wait for TEAMS
> To: jwalu at yahoo.com
> Cc: kictanet at lists.kictanet.or.ke
> Date: Saturday, August 1, 2009, 12:54 PM
> Competition!! Yes indeed is consumers
> best friend.
> 
> In fact, instead of staying out all night pinging, pinging,
> and
> pinging.. and nothing much changes...then burning ourselves
> out
> arguing on Seacom pricing, we should now strategise how to
> fuel more
> competition, confront next connectivity frontier-rural.
> 
> Skunkworks are pleased to inform you that PS Ndemo will be
> talking to
> us about the one million laptops stimulus, technology
> innovation and
> entrepreneurship- On Tuesday next week (4th August).
> 
> I intend to ask him "what would be the government's plans
> regards
> hooking Kenya up with http://www.o3bnetworks.com/?"
> 
> See the attached image.
> 
> Regards,
> 
> Alex
> 
> On Sat, Aug 1, 2009 at 3:41 AM, Joseph Mucheru<mucheru at google.com>
> wrote:
> > Walu,
> >
> > I personally think it is a bit simpler than that. Over
> the many years we
> > have lobbied for better services and/or prices in the
> country, the one sure
> > thing that always worked was competition. In the case
> of the cables, I think
> > the competitive pressures are much more for the
> operators as the investment
> > (stakes) are much higher. By various calculations both
> Seacom and Teams have
> > more than three times the current bandwidth demand.
> That means the wiser
> > operators will not only be the ones that are first to
> market, but those that
> > give the right price to attract the economies of scale
> they need to ever get
> > back their investment. Any operator that delays this
> process will only have
> > much more future cost to convincing consumers to get
> onto their network.
> >
> > I am convinced right now it is a consumers market and
> what will be
> > interesting is which operators are able to see things
> from a long-term
> > perspective and win the market. The fact that some
> operators have a much
> > broader and wider local loop infrastructure only makes
> this more interesting
> > and does not give outright victory to one.
> >
> > In summary, investment in the cables is a sunk cost
> and the game now is who
> > can get the user numbers on their network. Any
> short-term gains by an
> > operator through higer prices will cost them
> significantly more in the
> > long-run.
> >
> > my 2cts worth
> >
> > Joe Mucheru
> >
> > On Sat, Aug 1, 2009 at 1:14 AM, Walubengo J <jwalu at yahoo.com>
> wrote:
> >>
> >> Waudo,
> >>
> >> Difference -at least on paper- is that TEAMS was
> put up with Tax payers
> >> money by close to 40% (i think). Â So you and me
> have a 40% say or demand
> >> that they sell the bandwidth commodity at cost.
> Â But you and me (tax payers)
> >> have 0% (zero%) shares in SEACOM.
> >>
> >> SEACOM was put up with 100% private money - only
> the individual
> >> shareholders can decide on pricing (remember the
> famous SAT3 cable on the
> >> west-african cost that had little impact on
> pricing? the individual
> >> shareholders decided to keep the prices just 1-5%
> below satellite in order
> >> to recoup investment with the shortest timeframes.
> Â 15 years later, the
> >> prcing was still the same at 1-5% satellite costs.
> Â That is called Business-
> >> increasing shareholders value and yes nobody
> should apologies for that)
> >>
> >> In short, SEACOM can go the SAT3 way and you and
> CCK can shout as much as
> >> they want and they have every right not to care.
> Â BUT with TEAMS you and i
> >> do have a say - however small it is or it maybe.
> >>
> >> And its pretty grey area how say like Safcom with
> shares on both cables
> >> can be compelled to reduce prices because if push
> comes to shove Safcom can
> >> say their data is strictly running on the
> (private) SEACOM cable which is
> >> exempt from all the regulatory pressures. It can
> chose to say TEAMS is
> >> simply it back-up route.
> >>
> >> Thats why I think we are breaking new ground here
> and its going to be very
> >> interesting...
> >>
> >> walu.
> >>
> 
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