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

Wed Feb 16 19:13:47 EAT 2011

Let me try hadithi (or is it kitandawili?) for a change:

 "Once upon a time there was an animal call Kencell that thought he would rather deal with good paying customers by being expensive and rolling out an optimize network with low signal losses and 'clear as a bell' quality of service. This did not last long because some people felt left out and soon another animal called Safcom came to scene with cheaper-not-optimized-rather-poor-quality product that required shouts of 'hallo, hallo..' to get your message through and at times the new entrant would treat people to commercial hosted by a guy called 'mteja' who was not available most of the time. 

Anyway, majority somehow didn't mind shouting 'hallo hallo' or the missing ' Mr. mteja' and loved this new entrant and a few years down the road the new entrant had 85% share. Then kencell tried tricks like changing identity several times and but these tricks didn’t seem to work until one day .. a clever ‘magi’ from the east - India  to be specific, appeared on the scene with a bag full of old tricks. This time the disguise was called Airtel, Now Airtel strategy is simple ‘copy vhat the vinner is doing’ simple!
Now this set Safcom on panic mode and now Safcom has reverted to the role Kencell played  crying ‘foul! This is not what we meant by low price …  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 etc etc
End of story.

--- On Wed, 2/16/11, Bob Collymore <BCollymore at Safaricom.co.ke> wrote:

From: Bob Collymore <BCollymore at Safaricom.co.ke>
Subject: Re: [kictanet] Price Control in the Telecom Market in Kenya?
To: mleonardo at yahoo.com
Cc: "KICTAnet ICT Policy Discussions" <kictanet at lists.kictanet.or.ke>
Date: Wednesday, February 16, 2011, 10:43 AM

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 dÃ©veloppement international
Regional Office for Eastern and Southern Africa
Tel: +254202713160 | Fax/TÃ©lÃ©c: +254202711063 | Skype: edithadera
eadera at idrc.or.ke | www.idrc.ca | www.crdi.ca

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