[kictanet] State House moves in to quell mobile price wars

Mon Jun 13 15:22:12 EAT 2011

Francis,

I take issue with one part of your comment "that with lower call rates, operators will pay less taxes to the government thus less roads, less hospitals... the argument goes"

This is trickle down economic theory that believes that economies only do well when the biggest producers are doing well (and paying high taxes). Kenya has much more to benefit if lower call rates spur economic activity for the smallest businesses. If these small business can become more productive, the increase in employment and money in the hands of many people will do a lot more for the economy.

A recent world bank study found that for every 10% increase in mobile phone penetration, there is an economic growth increase of 0.81%.  The government can find other ways to  help operators protect their revenues  e.g. by sharing equipment, but let the small man benefit from lower call rates for it is in his hands that economic growth lies.

Regards,
Harry Karanja

Sent from my iPhone

On Jun 10, 2011, at 4:09 PM, Francis Hook <francis.hook at gmail.com> wrote:

> Well Roy, maybe a half hearted attempt at humour - I support Daktari - its not the first time he is getting drawn into these things.
> 
> In the last 5-7 years the telecom sector has come a very very long way. Unless mobile services become part of a welfare scheme that can be subsidised by the government, there is no need to let the market atrophy by further lowering termination rates - the rates as  they stand are OK IMHO.   To lower the rates further would have a negative effect - less investment by operators, less taxes to the government (to build roads, hospitals, schools.....and pay MPs, etc).    The ICT sector is increasingly becoming a major contributor to economic growth.
> 
> As consumers we should be happy to be here.   Never mind the independence of CCK being called into question - I think its about the bigger picture.
> 
> We've seen the top three players in the market either report losses or lower profits.  lets remember one of the players is a listed company (just as much as Uchumi was).   At the same time consumers are becoming more sophisticated and making demands on their service providers (quality of service, coverage, speed, etc).   If revenues continue to drop further, then there is no way operators can invest in these areas.  Unless of course we want to be content with sub standard mediocre services in the years ahead...
> 
> 
> 
> 
> On 10 June 2011 15:43, Paul Roy <roykoikai at gmail.com> wrote:
> Nice humor..?
> 
> PRO
> 
> On Jun 10, 2011, at 2:58 PM, Francis Hook <francis.hook at gmail.com> wrote:
> 
>> Reminds me of Exodus - how Moses and Aaron had to put up with the constant kvetching of the querulous Israelites :-)   
>> 
>> 
>> On 9 June 2011 22:12, <bitange at jambo.co.ke> wrote:
>> Stephen,
>> Even if termination rates goes to Zero, international call rates out of Kenya remains high.
>> 
>> It is important to know that this was not a knee jerk reaction as many may think.  The debate has been in public domain and indeed there were similar initiatives that were not challenged.  I think we applying double standards in this matter.  I will therefore not comment on this issue any further.
>> 
>> 
>> Regards.
>> 
>> 
>> Ndemo.
>> 
>> 
>> Sent from my BlackBerry®
>> 
>> -----Original Message-----
>> From: "Stephen Mutoro" <stephen at cofek.co.ke>
>> Date: Thu, 9 Jun 2011 16:34:03
>> To: <bitange at jambo.co.ke>
>> Reply-To: stephen at cofek.co.ke
>> Cc: KICTAnet ICT Policy Discussions<kictanet at lists.kictanet.or.ke>
>> Subject: Re: [kictanet] State House moves in to quell mobile price wars
>> 
>> Thanks Dktr. My personal respect for you and your views notwithstanding, I beg to differ not necessarily on the suitability of the decision but the approach/process. Nothing wrong for interested parties to intervene within contexts. But lets avoid setting bad and costly precedents - through our obsession as Kenyans with shortcuts or quick fixes and selfish deals whenever it suits us.
>> 
>> A brief story. I arrived in the country very early today. For the 5 days or so I've been away in Dakar, Senegal, my roaming bill came to about 7K not necessarily that I was making too many or long calls but the best I cld get is Sh59 per min for receiving calls and Sh108 for calling per min. Retrieving data/emails was even higher.
>> 
>> In short, the gains Kenyans have made on ICT and telcos sector (through you and others) are too dear to be wished/eroded away. Cofek and I request to be understood in this perspective. Lets accord CCK the "independence" and have it as practically as possible stir away from partisan influences. Good night!
>> Sent from my BlackBerry®
>> 
>> -----Original Message-----
>> From: bitange at jambo.co.ke
>> Date: Thu, 9 Jun 2011 19:14:03
>> To: <stephen at cofek.co.ke>
>> Cc: <bitange at jambo.co.ke>; KICTAnet ICT Policy Discussions<kictanet at lists.kictanet.or.ke>
>> Subject: Re: [kictanet] State House moves in to quell mobile price wars
>> 
>> Stephen,
>> I wish you first asked what transpired before you make such remarks.  CCK
>> gets its policy direction from the Ministry of Information and
>> Communications.  The policy emanates from the political manifesto of the
>> ruling party.  In our current case, the harmonized manifesto.  Here we
>> agreed to a free market economy.  This means that any market interventions
>> must reflect the underlying economic policy.
>> 
>> When we had accellerated price decline in Uganda, Congo and other
>> countries, they resulted to a floor price, in other words price control.
>> Had we taken that direction, we shall have undermined the underlying
>> economic policy.  Instead we temporarily suspended the glide path to study
>> the wider impact on the economy.  The CCK board arrived at that solution.
>> 
>> In my view you are misunderstanding the independence rule.  Central Banks
>> world over are independent but their decisions are based on the policy
>> direction of the country.  Even if you were to head this country you will
>> find that it is your policies that would govern the country since the buck
>> stops with the leadership.  It will make no sense if we have several
>> independent decision makers.
>> 
>> Different papers reported different stories but nobody has sought
>> clarification or offer a solution under the prevailing circumstances.
>> 
>> 
>> Regards
>> 
>> 
>> 
>> Ndemo.
>> 
>> 
>> 
>> 
>> > Indeed a desperate move and one that has neither moral nor legal basis.
>> > What a mockery of a futile attempt of by-passing regulatory regime. It is
>> > CCK that will be the "loser" if it cowardly allows a clear abuse of
>> > Section 5(b) of Info and Comms Act. Cofek will be seeking clarification
>> > from concerned parties. We must never allow State House to conduct sector
>> > regulatory matters, whether pro or anti-consumer. Rgds
>> > Sent from my BlackBerry®
>> >
>> > -----Original Message-----
>> > From: Dennis Kioko <dmbuvi at gmail.com>
>> > Sender: kictanet-bounces+stephen=cofek.co.ke at lists.kictanet.or.ke
>> > Date: Thu, 9 Jun 2011 12:17:55
>> > To: <stephen at cofek.co.ke>
>> > Cc: KICTAnet ICT Policy Discussions<kictanet at lists.kictanet.or.ke>
>> > Subject: Re: [kictanet] State House moves in to quell mobile price wars
>> >
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>> -- 
>> Francis Hook
>> +254 733 504561
>> 
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> 
> 
> 
> -- 
> Francis Hook
> +254 733 504561
> 
> 
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> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
> 
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