[kictanet] Kibaki, Raila meddling stalls CCK actions

Thu Aug 30 10:13:34 EAT 2012

MNOs are in this for the money. We must never forget that. That they offer
a social/economic good in the process is a consequence of their business
not the inspiration for it. This is why none but Safaricom thought it was a
good idea to put up a 3G network in a pitifully poor country. Safaricom
earned their dominance but they still must be controlled by government. I
believe the same happened to Microsoft in the US when they grew too big
they had to sell a stake to the government. I would rather trust the
government than a private firm out to make profit.

Attempting to divorce politics from reality is foolhardy and will not work.
Show me a completely independent body anywhere in the west ,east south or
north of the planet. Just one.

On Thu, Aug 30, 2012 at 8:00 AM, Ali Hussein <ali at hussein.me.ke> wrote:

> John
>
> Well put. Let me add my two cents here.
>
> The fact that we are discussing these very pertinent issues goes to show
> how far we have come as a country. And we should never take that for
> granted.
>
> Washington, sometimes desktop activism as you put it actually does work.
> Cases in point:-
>
> 1. The very lively debate on Internet Governance and ITRs that culminated
> in the IGFs that are now framing our positions prior to the Dubai WCIT in
> December.
>
> 2. The Corporate Governance debate on KeNIC that resulted in an open AGM
> and hopefully progress in reenergizing the Organisation.
>
> I'm sure there are other examples so don't despair as I believe the space
> is now open for Kenyams to provide concrete contributions for the
> betterment of our sector and the country at large.
>
> Back to the issue of the Telco sector. I honestly think that the problem
> lies mostly with the telcos themselves and not the regulator/Executive.
>
> One contributor mentioned the issue of Safaricom being the dominant player
> and engaging in monopolistic behavior. How did this happen? I recall a time
> when Airtel/Celtel/Zain had more subscribers or equal to Safaricom's. What
> happened?
>
> At the risk of sounding simplistic Telco services are now generic which
> basically means that what differentiates is the value addition, customer
> service and marketing. And let's not forget Data. More than half the
> country is still not experiencing high speed Internet - what we now take
> for granted in Nairobi.
>
> Towards the end of Ramadhan I visited my home county of Kilifi as is our
> tradition to break the fast with the wazees. I found it very frustrating
> that the Internet speeds I've now come to take for granted in Nairobi were
> non existent in the counties - at least in Kilifi. I'm willing to bet that
> this is true in the majority of the counties.
>
> This leads me to start thinking why are the Telcos not picking up these
> low hanging fruits? Could it be that they are so intent on competing with
> each other they have become myopic? I know one of the reasons that they may
> raise is the huge investment required to ensure this type of service.
> However, how many telcos right now are willing to co-invest in the
> infrastructure required? All we hear is this individual telco/ISP
> announcing another infrastructure investment.
>
> In my opinion this discussion on executive interference at the CCK is a
> red herring. It does not detract from the fact that sone of the Telcos and
> ISPs business models are broken and it's just a matter of time before they
> drown in red ink.
>
> Telcos/ISPs need to understand and embrace the concept of  'Frenemy'. Join
> forces and invest together in infrastructure and compete on service
> differentiation.
>
> Ali Hussein
>
> +254 773/713 601113
>
> Sent from my iPhone®
>
> On Aug 29, 2012, at 6:32 PM, John Kariuki <ngethe.kariuki2007 at yahoo.co.uk>
> wrote:
>
> Walu,Edith,Listers,
>
> The issue we face now seems to be a challenge facing many democratic
> governments(right from Canada through US,UK upto Australia) in the 21st
> century in an era of liberalization and globalization.
>
> Authors Warwick Funnel,Robert Jupe and Jane Andrew in their book "IN
> GOVERMENT WE TRUST",2009 have outlined these issues and quoted cases .
> Let me quote just two lines  on pages 48 and 49 of the book.
> They quote the concerns expressed by Adam Smith about "the tendency for
> the powerful in business to ingratiate themselves with goverment so that
> they might pursuade it to use its powers for their own benefit',p48
> "....'powerful capital interests could influence state policy to benefit
> them at the expense of labour'.,p49.
>
> Regarding our Mobile Termination Rate debate, the matter is one of
> competition law in telecommunications sector. In this case Safaricom has
> the largest mobile network by far and Telkom has the largest fixed network.
> So if you wish to call fixed line,there is no choice but to terminate in
> Telkom.Therefore there is little,if any, competition in the fixed
> termination market segment.They are virtually a monopoly in that market
> segment.
> In nearly similar situation, a very large number of mobile customers are
> on Safaricom network.If you wish to call them,there is really no choice but
> to terminate in the Safaricom network. By virtue of their size ,it is not
> difficult to notice that they have significant market power in that market
> segment.
>
> It is therefore in the interest of Safaricom and Telkom to keep mobile
> termination rates as high as possible since there is little or no
> competitive pressure in that market segment for them.
>
> In almost similar case involving Vodafone and others in UK in January
> 2003, the Competition Competition concluded that....."There is vigorous
> competition amomg MNOs(mobile network operators) to attract and sign up
> subscribers to their networks.......but this is funded by excess returns
> from termination charges......this 'distorts the volume and direction of
> traffic on the network,leading to a distorted pattern of usage by
> consumers'.
>
>
> John Kariuki
>
>   *From:* Walubengo J <jwalu at yahoo.com>
> *To:* ngethe.kariuki2007 at yahoo.co.uk
> *Cc:* KICTAnet ICT Policy Discussions <kictanet at lists.kictanet.or.ke>
> *Sent:* Wednesday, 29 August 2012, 16:13
> *Subject:* Re: [kictanet] Kibaki, Raila meddling stalls CCK actions
> **
>   @Edith,
>
> Ave been working on some academic model whose preliminary data seems to
> support Mr. Presidents interventions  i.e. the Telco  market must project
> significant Returns for the investor to continue playing.  Competition is
> good but cut-throat competition leaves the industry (Operators, Govt and
> Users) worse off than before.  Think about it - would you like FREE
> internet that is so congested that you cannot send an email? Or would you
> rather pay something extra for the reasonable use of the medium?
>
> Going back to Mr. Prime ministers interventions  - of protecting
> frequencies allegedly irregularly acquired by others.  My model has not
> factored in frequencies yet - But I think CCK may have a bigger impact on
> the market by recovering frequencies held up by the Military (there's a
> band that ITU declared for public use but previous reports indicated our
> Military seems to hoard this band - not sure if this has changed).
>
> As to whether the President's and/or the Prime Ministers interventions are
> legal? It is debatable. However, I think the current legislative framework
> - Kenya Comm Amendment Act 2009 - provides for the government in power to
> direct the Regulator - BUT through Policy frameworks - rather than through
> specific or selected directives arising from which CEO had dinner with the
> President/Prime minister the previous night.
>
> walu.
>
>
>
> --- On *Wed, 8/29/12, Edith Adera <eadera at idrc.or.ke>* wrote:
>
>
> From: Edith Adera <eadera at idrc.or.ke>
> Subject: Re: [kictanet] Kibaki, Raila meddling stalls CCK actions
> To: jwalu at yahoo.com
> Cc: "KICTAnet ICT Policy Discussions" <kictanet at lists.kictanet.or.ke>
> Date: Wednesday, August 29, 2012, 1:06 PM
>
>  Any reactions from Bwana Ndemo, who seems to have received one of the
> letters?
>
> Is this also the reason why Airtel changed their rates to subscribers from
> 1 shilling (permanent!! - the word has earned new meaning) back to ksh 3
> per minute? No one answered this question when I asked a while back.
> Airtel, why the change?
>
> As stakeholders, should we accept "regulatory capture" in this industry?
>
> Edith
>  *From:* kictanet [kictanet-bounces+eadera=idrc.or.ke at lists.kictanet.or.ke]
> On Behalf Of Grace Githaiga [ggithaiga at hotmail.com]
> *Sent:* Wednesday, August 29, 2012 12:36 AM
> *To:* Edith Adera
> *Cc:* KICTAnet ICT Policy Discussions
> *Subject:* [kictanet] Kibaki, Raila meddling stalls CCK actions
> **
>   IN SUMMARY
>
>    - The President’s intervention, which amounts to political meddling in
>    the work of an independent state organ, has for the second time in as many
>    years stopped the industry regulator, the Communications Commission of
>    Kenya (CCK), from lowering the Mobile Termination Rate (MTR).
>    - MTR is the price that operators pay each other for calls terminating
>    in their networks from outside and ultimately determines call costs.
>    - Mr Kibaki, who has been acting on behalf of Safaricom and Telkom
>    Kenya, issued the directive in a letter to Information permanent secretary
>    Bitange Ndemo, stating that there should be no change in the MTR until a
>    fresh study of the same is carried out.
>    - Prime Minister Raila Odinga, jumped into the CCK’s regulatory
>    mandate with a similar directive on behalf of yet another big business –
>    Royal Media Services.
>    - Mr Odinga wrote to the CCK director-general asking him to withdraw
>    the notice he had published of intention to revoke frequencies that the
>    media house is accused of acquiring irregularly.
>
>
>
> http://www.businessdailyafrica.com/Kibaki+Raila+meddling+stalls+CCK+actions+/-/539546/1489216/-/bay1qg/-/index.html
>
> -----Inline Attachment Follows-----
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> for people and institutions interested and involved in ICT policy and
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> sector in support of the national aim of ICT enabled growth and development.
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> KICTANetiquette : Adhere to the same standards of acceptable behaviors
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> 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.
>
> KICTANetiquette : Adhere to the same standards of acceptable behaviors
> online that you follow in real life: respect people's times and bandwidth,
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-- 
Regards,

Mark Mwangi

markmwangi.me.ke
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