[kictanet] Price Control in the Telecom Market in Kenya?

[Eng. Wainaina Mungai]

Hi Bob,

We cannot deny that Safaricom is "enjoying market power". That ship
sailed a while back... and we congratulate the team that built
Safaricom into a success story for subscribers; shareholders...and of
course, the tax man ;-) .

Pricing is not the only issue your clients have....some issues include
an unreliable customer care, poor service quality (coverage even in
some estates in Nairobi) and a dismissive attitude to customers....

Safaricom used to be a brand "for the people"...and many Kenyans
benefited from the value-chain as dealers, retainers...consumers...
The script has changed and "Niko na..." brand might end up as an
expensive advertising campaign unless Safaricom stops giving corporate
and individual subscribers the impression that they need to put up
with skewed partnerships "because you are Safaricom".


> 4 We explained the simple economics of the company that for 8 years has
> re-invested it's profits in developing the industry to a level that gives
> 85% of the Kenyan population access to mobile telephony at a price below the
> rest of Africa and most of Europe and that has brought empowering
> technologies and innovations such as M-Pesa to ordinary Kenyans.  For some
> reason the consequences of this investment by the company is not recognised
> as empowering but rather as 'enjoying market power'






On 2/16/11, Bob Collymore <BCollymore at safaricom.co.ke> wrote:
> To help to inform this debate I'd like to state a few facts.
>
> 1 Safaricom did NOT 'take this issue to parliament".  Rather we were invited
> by the Parliamentary Committee to discuss a range of issues including the
> price wars.  Other operators were given a similar opportunity a while ago.
>
> 2 Safaricom did NOT request retail price control.  We simply pointed out
> that where predatory price wars were threatening development of the
> industry, the Governments of Sri Lanka, DRC and most recently Uganda ended
> up stepping in with price floors.  Those who refuse to learn from the
> lessons of history are inevitably condemned to die by it.....
>
> 3 We attempted to debunk the myth of high Kenyan call charges stating the
> fact that Kenya has the lowest calling charges across Africa.
>
> 4 We explained the simple economics of the company that for 8 years has
> re-invested it's profits in developing the industry to a level that gives
> 85% of the Kenyan population access to mobile telephony at a price below the
> rest of Africa and most of Europe and that has brought empowering
> technologies and innovations such as M-Pesa to ordinary Kenyans.  For some
> reason the consequences of this investment by the company is not recognised
> as empowering but rather as 'enjoying market power'
>
> I am happy to have the debate but please let's do so from a position
> informed by facts.
>
> Sent from my iPad
>
> On 15 Feb 2011, at 19:44, "Edith Adera" <eadera at idrc.or.ke> wrote:
>
>> Listers,
>>
>> The news I heard today made me wanna shadder!
>>
>> A player with market power asking for price controls in the telecom
>> market? Are we progressing or retrogressing?
>>
>> Telecom Economics dictates otherwise and this must NOT happen in a free
>> and competitive market! Our recent discussions on broadband access just
>> goes to confirm that we are not there yet. We have not yet reached the
>> most remote and isolated corners of this country....control MUST not be an
>> option!
>>
>> The Kenyan consumer continues to be constrained by availability,
>> accessibility and affordability to fully realize the socio-economic
>> benefits of telecoms.
>>
>> As a voice for the common consumer.....among a million other
>> voices......price control is NOT an option!
>>
>> Edith
>>
>> ________________
>> Edith Ofwona Adera
>> Senior Program Specialist
>> ICT4D Program and Climate Change & Water Program
>> International Development Research Centre | Centre de recherches pour le
>> développement international
>> Regional Office for Eastern and Southern Africa
>> Tel: +254202713160 | Fax/Téléc: +254202711063 | Skype: edithadera
>> eadera at idrc.or.ke | www.idrc.ca | www.crdi.ca
>>
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>
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