[kictanet] CCK vs Safaricom?- and now Safcom vs the Rest?

Wed May 5 13:10:42 EAT 2010

True, regulations would be to guard against anti-competitive behaviour more so for an operator with dominant market power....but not to curtail their lead.

If my memory serves, Telkom South Africa was slapped with a huge fine (USD 500 million!!!) when they lost a case in which a research group provided empirical evidence to the supreme court that their prices were prohibitively high (over exploiting consumers) and that they exhibited anti-competitive behaviour. Would this happen in Kenya? Read more about the judgment
http://www.supremecourtofappeal.gov.za/judgments/judgem_sca_2009.html

A short synopsis can be found on LIRNE Asia's blog:
http://lirneasia.net/2009/11/south-african-appeal-court-affirms-role-of-independent-think-tanks/
For the case of Kenya, prices remain artificially high!. While there is semblance of competition (i.e. 4 players in the market), the reality is that there's no real competitition as subscribers are stuck with their provider of choice for social reasons (most of your friends and associates are on the same network) so irrespective of the prices charged, the quality of service etc...you're "imprisoned' within that network. This therefore does not push the boundaries of "Quality of service"; "competitive prices"; consumer choice etc.

We have market failure - how do we unlock this?

There was a recent debate on KICTANT about number portability as a possible way out...we however need to learn from those who have tried it to implement it in ways that it will make a difference, but I think it might possibly be one of the practical solutions to consider coupled with educating the masses and taking into consideration social practices and preferences etc. We must try something to get out of this regime of incredibly high prices!

Can we hear from the regulator what they have in mind to deal with high prices, poor quality of service in this country!

Edith

_________________
Edith Ofwona Adera
Senior Program Specilaist
International Development Research Centre | Centre de recherches pour le développement international
+254- 20- 2713160 ext 3406 or +1-613-696-3406 | eadera at idrc.or.ke<mailto:+1-613-696-3406eadera at idrc.or.ke>  | www.idrc.ca<http://www.idrc.ca/> | www.crdi.ca<http://www.crdi.ca/>
________________________________
From: Wamuyu Gatheru [wamuyulearn at yahoo.co.uk]
Sent: 05 May 2010 10:39
To: Edith Adera
Cc: KICTAnet ICT Policy Discussions; ke-users
Subject: Re: [kictanet] CCK vs Safaricom?- and now Safcom vs the Rest?

This morning I learnt a few things from M Joseph while interviewing with KISS FM. a)  that Safaricom was not the first in the mobilie phone market b) according to many subscribers who called into the show, Safaricom is also an expensive service.

For those who didnt listen in, M Joseph claimed that the monopoly regulations should be about abuse of monopoly rather than holding the market leader back just because they lead.

If Safaricom is expensive and still leads, then the price management mechanism proposed in the regulations should not matter. Unless ofcourse their competition can lower their prices significantly while Safaricom is stuck negotiating similar prices with the CCK for three months (as the regulations propose).

Personally, if Safaricom can keep us talking even in peak times, get the Customer Care service trully accessible, improve the 3G service to match its high cost, I would prefer that they work in an unfettered manner. Like many, am a shareholder too. I also learnt that one of their competitors once said that introducing the Blackberry would be unworthwhile in a developing country! We need companies who respect the country and this market.

regards, Wamuyu

P/S Is the govt being inconsistent on monopoly? Why are the EA Breweries allowed to get away with monopoly decade after decade?

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