[kictanet] [mediaeditors] Safaricom's Super Profits

Sat May 18 13:16:11 EAT 2013

@Edith,

Good questions.  Super profits are supposed to be good since they would signal to investors to jump into the Kenyan Market.  However, as you note, our Kenyan telco market, particularly the Data /Internet side is largely a "duopoly" with Safaricom  taking 73% of the internet market with the "Others" sharing out the 27% market share.

Obviously the "others" have failed to break Safaricoms dominant position and it is clear the reason why users dont migrate to "others" despite occasional price wars is their killer and globally renowned application "MPESA".  As a very smalltime investor in Safaricom, I have no problem with the super-profits, but I do have a problem with the fact that as a country, we are not getting Internet Services that are affordable, high-quality and geographically widely available.
I know the latest CCK reports show that 16million of Kenyans use the internet (one of the highest % of population in Africa) but the same report says only 1million are on broadband quality of internet.  This means that usage is restricted to light tasks such as email, twitter, facebook but unlikely to get into say Telecommuting, Videoconferencing, High-end research that requires massive movement of big-data, etc.

So Price and Quality amidst Super profits are the challenges the Regulator must face squarely.

walu.

________________________________
 From: Edith Adera <eadera at idrc.ca>
To: jwalu at yahoo.com 
Cc: KICTAnet - Media Editors Forum <mediaeditors at lists.kictanet.or.ke>; Alison Gillwald <agillwald at researchictafrica.net>; Christoph Stork <christoph.stork at googlemail.com>; KICTAnet ICT Policy Discussions <kictanet at lists.kictanet.or.ke> 
Sent: Saturday, May 18, 2013 12:35 PM
Subject: Re: [mediaeditors] [kictanet] Safaricom's Super Profits

Barrack and Ngethe,

I think otherwise.

The super-profits seem to arise NOT from "real productivity gains" or "reward from entrepreneurship" but from monopolizing access to the market (e.g. mpesa has tied people to Safaricom; consumer behavior of not shifting despite number portability or  poor quality of service as Barrack points out or high price of service or the availability of other money transfer options – etc etc etc). Here is where the “PECULIAR” behavior of Kenyans needs to be unearthed – We need to “peel off the mask” if I can borrow those words. 

So this has created some ARTIFICIAL “exclusivity” of Safaricom products creating monopolistic or oligopolistic tendencies in the Kenyan telecom market.

So you cannot entirely blame Safaricom for this state of affairs, we need to get to the “kernel” of the issue to understanding why the Kenyan market seems to be so unique and consumer prices are just not coming down!! (maybe Kenya is not alone?)

I would really like to hear from Research ICT Africa who have been carrying out consistent research studies (for the last 10 years or more) comparatively examining over 22 telecom markets in Africa (including Kenya) under the title “Telecommunication Sector Performance Reviews” (http://www.researchictafrica.net/publications.php) – our own Prof. Waema, Muriuki Mureithi, Dr Adeya have been leading the Kenyan studies. I have also copied Christorph Stork and Alison Gilwald, why Kenya is different?

Would also be great to hear from Matano (CCK)?

Edith

-----Original Message-----
From: ngethe.kariuki2007 at yahoo.co.uk [mailto:ngethe.kariuki2007 at yahoo.co.uk] 
Sent: May 18, 2013 11:48 AM
To: Edith Adera; kictanet
Cc: KICTAnet - Media Editors Forum; KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Safaricom's Super Profits

Edith,Listers,
Interesting questions raised.The results are not entirely unexpected and that is why,inter alia, CCK and Competition Authority were established.

John Kariuki
Sent from my BlackBerry®

-----Original Message-----
From: Edith Adera <eadera at idrc.ca>
Sender: "kictanet"
<kictanet-bounces+ngethe.kariuki2007=yahoo.co.uk at lists.kictanet.or.ke>
Date: Sat, 18 May 2013 08:38:42 
To: <ngethe.kariuki2007 at yahoo.co.uk>
Cc: KICTAnet - Media Editors Forum<mediaeditors at lists.kictanet.or.ke>; KICTAnet ICT Policy Discussions<kictanet at lists.kictanet.or.ke>
Subject: [kictanet] Safaricom's Super Profits

_______________________________________________
kictanet mailing list
kictanet at lists.kictanet.or.ke
https://lists.kictanet.or.ke/mailman/listinfo/kictanet

Unsubscribe or change your options at https://lists.kictanet.or.ke/mailman/options/kictanet/ngethe.kariuki2007%40yahoo.co.uk

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.

KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
_______________________________________________
mediaeditors mailing list
mediaeditors at lists.kictanet.or.ke
https://lists.kictanet.or.ke/mailman/listinfo/mediaeditors

This message was sent to: jwalu at yahoo.com
Unsubscribe or change your options at https://lists.kictanet.or.ke/mailman/options/mediaeditors/jwalu%40yahoo.com
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <https://lists.kictanet.or.ke/pipermail/kictanet/attachments/20130518/4d41f10b/attachment.htm>