[kictanet] Are we letting the PS get away with this too?

Tue Jan 18 19:29:22 EAT 2011

Guys.

How about we just let the prices go down till the govt has to set
prices ? Or till the Govt supports MNO's (like posta and telkom for a
loooooong time)

Seriously, the same peeps who were complaining about call costs 3
years are worried about the telcos collapsing.

This is the same language we heard when  ISP's we asked to reduce
bandwidth prices ...

 Unsustainable :)

On 1/18/11, John Kieti <jkieti at gmail.com> wrote:
> Hi Walu and other esteemed Kenyans,
>
> This debate is interesting. As mentioned earlier by someone, the debate
> would be more enlightening if the cost structure of these MNOs had been in
> the public domain. But all is not lost; there are some basic parameters
> already in the public domain ie. (1) Safaricom's dominant position of about
> 77% market share and (2) Airtel's low price strategy including their 1 bob
> on-net offer in an attempt to eat into Safaricom's market share. It appears
> a little premature then to raise a concern of Anti-Trust against a
> non-dominant player, when they have not even achieved a half of the dominant
> player's market share.
>
> The current cost structure and profit margins for voice, SMS and all other
> product offerings is what we really need to understand before going into any
> conclusion on long term sustainability. It seems easy to see that brand
> loyalty and patriotic sentiments are strong everywhere this debate comes up
> but it might also help to see these harder facts.
>
> Lastly, in today's dynamic economic environment, one has to either innovate
> or die - and our dear Safaricom has demonstrated substantial competence on
> this. It then appears that innovation is what will sustain growth of the
> industry - really not regulation and protectionism.
>
> Best regards
>
> On Tue, Jan 18, 2011 at 6:09 PM, Walubengo J <jwalu at yahoo.com> wrote:
>
>> Harry, tough questions you have and the answers may most likely neutralize
>> my argument. But the bigger point is/was that certain type of competitive
>> tactics can be counterproductive when looked at from a Macro perspective.
>> Yes, you (Airtel) wins todays battle, but someone bigger than Safcom will
>> lose the war.
>>
>> With the  Microsoft Case- European Courts ruled that their tactic was
>> anti-competitive and they were forced to seperate their Browser from their
>> OS, rather than sell as a bundle. But I think it was a case of too little
>> too late.  Did internet numbers go down? probably not since Internet
>> numbers
>> do depend on more factors other than just Browsers.
>>
>> But for the mobile industry, their growth and expanse does depend on
>> revenues. I can forcasts that VOICE Revenue generated from all players
>> might
>> be the same as last year because the voice industry may not grow - it will
>> simply be shared out.. And after the price-wars are over and an
>> equilibrium
>> is established (maybe Airtel  50% others 50%) it will dawn on everyone
>> that
>> they incoming revenue streams is insufficient to deliver expansion or
>> extend
>> the services outside their current levels.
>>
>> walu.
>>
>>
>>
>>
>>
>> --- On *Tue, 1/18/11, Harry Hare <harry at africanedevelopment.org>* wrote:
>>
>>
>> From: Harry Hare <harry at africanedevelopment.org>
>> Subject: Re: [kictanet] [Skunkworks] Are we letting the PS get away with
>> this too?
>> To: "Walubengo J" <jwalu at yahoo.com>
>>
>> Cc: "KICTAnet ICT Policy Discussions" <kictanet at lists.kictanet.or.ke>
>> Date: Tuesday, January 18, 2011, 5:22 PM
>>
>> Walu good analogy with Netscape and MS IE. However
>>
>>    1. Did the Internet die with the death of Netscape?
>>    2. Did the Internet numbers stay constant with the death of Netscape?
>>    3. Did Microsoft marketshare drop?
>>    4. Did innovation on the internet stop?
>>
>> Guys, let get real, this is business…natural selection comes into play.
>>
>> Kindest Regards
>>
>> Harry Hare
>> Director
>> *
>> eDevelopment House  : :  604 Limuru Road
>> * Old Muthaiga  : : P O Box 49475 00100
>> Nairobi : : Kenya
>> T +254 20 3741646/7 : :  C +254 725 650044
>>
>> Training :  : Research:  :Consultancy:  : Publishing
>>
>> From: John Walubengo
>> <jwalu at yahoo.com<http://mc/compose?to=jwalu@yahoo.com>
>> >
>> Date: Tue, 18 Jan 2011 05:35:58 -0800 (PST)
>> To: Harry Hare
>> <harry at africanedevelopment.org<http://mc/compose?to=harry@africanedevelopment.org>
>> >
>>
>> Cc: KICTAnet ICT Policy Discussions
>> <kictanet at lists.kictanet.or.ke<http://mc/compose?to=kictanet@lists.kictanet.or.ke>
>> >
>> Subject: Re: [kictanet] [Skunkworks] Are we letting the PS get away with
>> this too?
>>
>> Here are my thoughts.
>>
>> The PS is right about predatory pricing never aimed at growing the
>> Industry.  For those who were "alive" at the beginning of the web-browser
>> wars in early 1990s. Netscape was King. Then Microsoft came in and gave
>> away
>> its product Internet Explorer(IE) - for free. Everyone was happy - until
>> they realized they were paying for the Microsoft IE through other means
>> (by
>> buying for the OS for example). But by then Netscape as a competitor was
>> as
>> dead as the Dodo. Microsoft Mission accomplished.
>>
>> Folks, Airtel is not here because they love giving free things. I am not
>> privy to their Strategy but it can be read by anyone.  Their aim is not to
>> grow/extend the Service, but rather to eat Safaricom's lunch. At a
>> consumer
>> level, nothing really wrong with that and infact it is Christmas time for
>> consumers.  BUT at a national level, what you have is that the 20million
>> subscribers you currently have in the country, will remain 20million
>> subscriber five years later.  Only that half of them will be sitting on
>> Airtel's network and the other half will be with "Others". Net growth for
>> Kenya? =ZERO
>>
>> Airtel's strategy wont kill the mobile industry, but believe you me, it
>> will stiffle its growth in the long run, because the returns to the
>> investors will not be sufficient to sustain operations, let alone extend
>> the
>> network or pay for innovation.
>>
>> That said, as a consumer, Airtel's offer is truly irresistible and worth
>> considering.  But as a scholar, I do know, and agree that it is not good
>> for
>> the industry in the long run.
>>
>> walu.
>>
>>
>> --- On *Tue, 1/18/11, Odhiambo Washington
>> <odhiambo at gmail.com<http://mc/compose?to=odhiambo@gmail.com>
>> >* wrote:
>>
>>
>> From: Odhiambo Washington
>> <odhiambo at gmail.com<http://mc/compose?to=odhiambo@gmail.com>
>> >
>> Subject: Re: [kictanet] [Skunkworks] Are we letting the PS get away with
>> this too?
>> To: jwalu at yahoo.com <http://mc/compose?to=jwalu@yahoo.com>
>>
>> Cc: "KICTAnet ICT Policy Discussions"
>> <kictanet at lists.kictanet.or.ke<http://mc/compose?to=kictanet@lists.kictanet.or.ke>
>> >
>> Date: Tuesday, January 18, 2011, 1:22 PM
>>
>>
>>
>> On Tue, Jan 18, 2011 at 1:18 PM, Barrack Otieno
>> <otieno.barrack at gmail.com>wrote:
>>
>> You have a point Brainiac, there are many factors in your argument which
>> need to be tackled and as such we may need expert opinion on some issues,
>> a
>> corporate entity is treated as a person  and as the saying goes one mans
>> meat is another mans poison, what are the implications of certain moves on
>> new market entrants? How will the other Telcos survive in the market?,
>> this
>> is where regulation comes in to ensure a piece of cake for everyone.
>>
>>
>> Before making this debate so complicated, is Airtel's move interpreted as
>> a
>> means towards crippling the mobile industry?
>> Why is this position not being applied on the Internet Service Provision
>> industry then? We always heard promises of "prices will come down" but
>> when
>> they do now, the govt is gonna lose revenue? Puleease!
>>
>> --
>> Best regards,
>> Odhiambo WASHINGTON,
>> Nairobi,KE
>> +254733744121/+254722743223
>> _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
>> Damn!!
>>
>>
>> -----Inline Attachment Follows-----
>>
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>
>
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