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

Thu Feb 17 07:07:20 EAT 2011

Kenya has chosen the "technology neutral" path, difficult to dictate to operators, but what other regulatory measures can be put in place to ensure that happens?

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<mailto:eadera at idrc.or.ke> | www.idrc.ca<http://www.idrc.ca/> | www.crdi.ca<http://www.crdi.ca/>
________________________________
From: kictanet-bounces+eadera=idrc.or.ke at lists.kictanet.or.ke [kictanet-bounces+eadera=idrc.or.ke at lists.kictanet.or.ke] On Behalf Of james ratemo [jratemo at gmail.com]
Sent: 16 February 2011 12:41
To: Edith Adera
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Price Control in the Telecom Market in Kenya?

It will be interesting to hear what CCK has to say about this.

As for me I think there could be some bullying going on in the industry. But again we should guard against price predation where some operators could bring the price so low, kick out or discourage potential 'other' competitors that would lead to a near monopolistic regime.

Yeah as Ndemo argues, we need the operators to rollout 3G extensively. As much as we need low prices we also need quality services. A balance must be struck to ensure satisfaction for customers and sustainability for investors.

Keep the debate rolling.

On Wed, Feb 16, 2011 at 11:58 AM, <bitange at jambo.co.ke<mailto:bitange at jambo.co.ke>> wrote:
Edith,
Prices will eventually come down even below one shilling especially when
Subscriber base begins to exceed 100%.  It is selfish for us now to
celebrate lower tarrifs when coverage is at 40%.  We need to improve
coverage to at least 90%.  There are pockets even in Nairobi where none of
the operators has covered.  The quality of service is still wanting as new
technologies that put pressure on capex keep on emerging.  We are not
seeing aggresive rollout of 3G which all of you agree that it is critical
to our last mile broadband.

For many years, Kenya's development has largely been minimalist,
depressing and expensive.  In the past few years, we started moving from
such experiments and made serious interventions in the Telcoms and Road
sectors.  Serious investors are now considering Kenya as a good investment
destination.  Other consideration include return on investment not only
for foreign investors but local investors too.  Margins therefore become a
critical factor.

There is no where in the world where lower margins have kept pace with
technology.  Any analyst will tell you that at the pace which prices are
coming down in Kenya, one operator is bound to die.  Unfortunately, most
of the celebrating crowd will train their spears on government asking what
it was doing.  Whichever way the government gets the flak.  That is why I
make no apologies for taking a conservative stand.

Regards

Ndemo.

> 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<mailto:eadera at idrc.or.ke><mailto:eadera at idrc.or.ke<mailto:eadera at idrc.or.ke>> |
> www.idrc.ca<http://www.idrc.ca><http://www.idrc.ca/> | www.crdi.ca<http://www.crdi.ca><http://www.crdi.ca/>
> [https://email.idrc.or.ke/owa/attachment.ashx?id=RgAAAAANayfd3%2b2VQYZo%2flcEcy23BwBGVjMm%2bu2wT5L%2b09sJnJi7AAACCuteAABGVjMm%2bu2wT5L%2b09sJnJi7AB4xzB0cAAAJ&attcnt=1&attid0=EAAMf1dr1NMFTaXab9x9F4f4]
>
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