[kictanet] CCK to renew Safaricom's licence

Wed Jul 31 10:24:23 EAT 2013

@Ali,

I hear you.  Most people agree that Safcom got where they are through sheer hard work and determination and they continue to innovate almost on a daily basis.  But from a Regulatory point of view, a  monopoly is rarely a good thing in a free market economy - and economists have designed mechanism to break down monopolies.  I think the currently being amended Kenyan Communication Act  had provision on what to do with a "dominant" player - where dominant is the technical term for a player whose market power in a competitive market is such that the competition in the market is only on paper.

The idea of breaking up Safaricom is not so much to split it up into multiple smaller companies i.e. the AT&T way.  My thinking is that something needs to be done around their Killer data application MPESA.  MPESA product needs to be commoditized - in other words, Safcom should be made to consider it a shared platform where other Operators can buy access/rights of use on this platform.

In other words, we need to "unbundle" MPESA and inject a new lease of innovation that is not limited within Safaricom, but can also be initiated by other Operators who through regulation have been enabled to sell services through MPESA. 

Would this be punishing Safaricom for being successfull? I dont think so, in fact we shall be opening up a whole new phase of competition since as at now- competition is dead within the data market.  And Safaricom being the innovative company it is, it will be just another 5years and they will have discovered something else to keep them ahead of competition. And after 10years, the regulator should come in and do the "unbundling" magic again.

That is what I meant with regards to breaking up Safcom.

walu.

________________________________
 From: Ali Hussein <ali at hussein.me.ke>
To: jwalu at yahoo.com 
Cc: Consumer and Public Affairs <CPA at cck.go.ke>; KICTAnet ICT Policy Discussions <kictanet at lists.kictanet.or.ke> 
Sent: Wednesday, July 31, 2013 3:32 AM
Subject: Re: [kictanet] CCK to renew Safaricom's licence

@Walu

What do you call a Monopoly created not by the Government (ala Kenya Power, KPTC, KPA etc) but by the market/consumer through sheer innovation and good leadership? 

Hauling these in court and trying to break them up misses the point. What the market and consumer can give, it can take away (in a Nairobi minute!). The US Government in the early part of the century broke up Standard Oil because at one point it was supplying 90% of kerosene to households across the US (Yes, there was a time that electricity was not ubiquitous and kerosene was the energy source to light up homes). The government broke it up. But electricity rendered the monopoly irrelevant. The same can be said for Microsoft, Apple, Google, Facebook etc. the market is not perfect but it is more efficient than the Government - any day.

Oh by the way..almost a century later, the different parts of Standard Oil (more than 20 pieces of it) have morphed back again into one - Today we know the company as ExxonMobil. But it is far from a monopoly. For those of you who are interested you can read/watch about this in the series called 'The men who built America'. Just Google it.

As for Safaricom. They continue to innovate and ignore their customers at the same time. A paradox really because with all their innovations they are forgetting another important innovation area - their operations. I suspect there is another Pesky Start Up waiting to eat their lunch and the best we can do is not to put ideas into the regulator's mind that they can overstep their mandate.. Their's is not to break up monopolies but to provide a level playing field and let Wanjiku decide where to put her Shilingis.

My two cowries

Ali Hussein
CEO | 3mice interactive media Ltd
Principal | Telemedia Africa Ltd

+254 713 601113/ 0770 906375

"The future belongs to him who knows how to wait." - Russian Proverb
Sent from my iPad

On Jul 30, 2013, at 9:25 PM, "Wambua, Christopher" <Wambua at cck.go.ke> wrote:

Edith,
>
>
>I think you are not fair in your assessment. Measuring QoS and levying penalties for non - compliance as stipulated in the law and respective operators licences does not constitute not taking tangible action or fearing a licensee. 
>
>
>The fact that we are seeking to enhance the penalties for non - compliance  in the law demonstrates a commitment to address the problem. 
>
>
>Finally, we also need to appreciate that consumers have a responsibility to take advantage of  prevailing competition in the market that CCK has facilitated. 
>
>
>Wambua
>Sent from my BlackBerry 10 smartphone.
>From: Edith Adera
>Sent: Tuesday, 30 July 2013 14:49 PM
>To: Wambua, Christopher
>Cc: Consumer and Public Affairs; KICTAnet ICT Policy Discussions
>Subject: Re: [kictanet] CCK to renew Safaricom's licence 
>
> 
>Walu,
> 
>Well presented!
> 
>We should be worried, VERY worried, when the “referee” begins to fear the “player”!! 
> 
>Poor QoS is acknowledged, but NO tangible action!
> 
>I feel that CCK is “skirting around the problem”!! 
> 
>Edith
> 
>From:Walubengo J [mailto:jwalu at yahoo.com] 
>Sent: July 30, 2013 2:37 PM
>To: Edith Adera
>Cc: Consumer and Public Affairs; KICTAnet ICT Policy Discussions
>Subject: Re: [kictanet] CCK to renew Safaricom's licence
> 
>@Edith,
>
>I am not a regulator and neither do I intend to shield  Wambua/CCK from your question.  But I can tell you one way to deal with poor service is to provide competition which I believe CCK has done very well.
>
>(Un?)Fortunately through sheer hard work (or otherwise?) Safcom has managed to get 78% market share in the data market. So they are for all purposes and intent a monopoly in that space.   Monopolies by nature tend to be dictate alot of things - including how
 to make more money within the shortest time a
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