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

[Badru Ntege]

Athar

In this aspect ethical perspective to ,me would be the wrong terminology.  Ethics and fierce competition are not good bed fellows.  

Ethical 


BN



On 17 Feb 2011, at 16:52, Athar Ahmad Bhatti <atharab at gmail.com> wrote:

> Why don't you analyse this from an ethical perspective:-
> 
> 1) Is the competition currently in place beneficial to the common mwanainchi ? I believe the  answer is yes. Price wars help the majority as they can get more for less.

The answer will be yes if you look at the short time. I.e today however what are the long time repercussions for the industry in the long run.  
> 
> 2) Is putting a price floor useful to the common public ? Well you decide, my view is that this will deny the public the right to cheaper quality services. Isn't it human nature to purchase cheaper yet quality products. You also deny the public the right to innovation that fierce competition brings.

In some sectors cheaper and quality will work but in the telco sector cheaper and quality are not easy to balance and thus the increase in dropped calls and congested lines.  The floor needs to be marched with deliverable measures of quality.  If a telco can guarantee a level of service then they can lower the price.  If they fail to meet that level of service then they should operate at the stipulated floor.  
> 
> 3) Can taxes be controlled/maintained due to price control floors? If i'm not mistaken there is no relationship. My take is that with lower prices you will speak for longer hours and thus still run up a bill that will assist in adding to the tax kitty of KRA and the people at large.
> 
> The people defining these floors must consider  that it will be hampering business development and the move would be ethically questionable as the winners of such a move would be the minority and not the majority . 
> 
> A word of warning: Putting a price floor on one product will open avenues for other moguls to  apply for floors. Petrol, food, housing, clothing, electricity, water .... 

But not putting a price floor does not prevent the same moguls from doing the same.
> 
> I hope you get the picture.
> 
> Thanks 
> 
> Athar
> 
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