[kictanet] Safaricom shuts down cash for Bonga Points platform

[Kamotho Njenga]

Thanks Hussein for bringing up this matter.

It seems Safcom is so engrossed in protectionism to an extent that the firm
has little respect for individual liberties, flexibility of choices or the
law of the land. Needless to say, once a firm has made an undertaking to
customers to award Bonga points when they spend their airtime on its
network, the firm becomes duty bound to fulfill that obligation in its
entire measure. As soon as the Bonga points have accrued to a subscriber,
they immediately cease to be mere sales talk or a discretionary bonus which
the firm can choose to honor or not. They immediately mutate into a perfect
entitlement that is legally recognizable. No reasonable firm would
therefore limit how a loyal subscriber chooses to activate such an
entitlement. The only acceptable limitations are those that may naturally
arise due to lack of technological capacity that would widen the range of
options through which customers could gain full benefit of their hard
earned bonga points.

Instead of celebrating and embracing the landmark application by Onfon
Media and its associated flexibilities, Safcom shut it down. By so doing
Safcom  lost an opportunity to further the scope of options within their
loyalty program. Most significantly, the firm flouted the trade law and its
conventional tenets. According to Section 21 of the Competition Act (2010)
"Agreements between undertakings, decisions by undertakings or concerted
practices by undertakings which have as their object or effect the
prevention, distortion or lessening of competition in trade in any goods or
services in Kenya, or a part of Kenya, are prohibited".

Section 24 of the Act reads as follows:
24. Abuse of dominant position
(1) Any conduct which amounts to the abuse of a dominant position in a
market in Kenya, or a substantial part of Kenya, is prohibited.
(2) Without prejudice to the generality of subsection (1), abuse of a
dominant position includes--
(a) directly or indirectly imposing unfair purchase or selling prices* or
other unfair trading conditions;*
(b) *limiting or restricting production, market outlets or market access,
investment, distribution, technical development or technological progress
through predatory or other practices;*
(c) applying dissimilar conditions to equivalent transactions with other
trading parties;
(d) making the conclusion of contracts subject to acceptance by other
parties of supplementary conditions which by their nature or according to
commercial usage have no connection with the subject matter of the
contracts; and
(e) abuse of an intellectual property right.
(3) Any person who contravenes the provisions of this section commits an
offense and shall be liable on conviction to imprisonment for a term not
exceeding five years or to a fine not exceeding ten million shillings or to
both.

This action of disabling the phone code that was being used to trade in
Bonga Points by Onfone media by Safcom borders on intrusion into private
transactions between consenting parties. Unless Safcom can show evidence
that the inter-party dealings with Bonga points have exposed the firm to
any fraud or justifiable risk, they owe an apology to the ICT fraternity
and the entire world for attempting to stifle innovation.

Kamotho


On Thu, Nov 7, 2013 at 9:58 AM, Ali Hussein <ali at hussein.me.ke> wrote:

> Safaricom<http://www.businessdailyafrica.com/stocks/-/1322440/1394278/-/shkse6/-/index.html> has
> disabled a phone code that was being used to trade in Bonga Points by a
> Nairobi-based IT firm.
> Onfon Media developed the code, *981*400#, that it was using to buy the
> loyalty points from Safaricom subscribers at Sh0.20 each and selling them
> for Sh0.35, hence earning a return of 75 per cent.
>
> Read on
>
> http://www.businessdailyafrica.com/Corporate-News/-/539550/2055474/-/xk1n6az/-/index.html
>
> There should be a healthy debate on whether doing this is the right thing
> to do by Safaricom and whether it is anti-innovation...
>
> I for one wouldn't mind some cash event for my thousands of bonga
> points...:)
>
> Ali Hussein
>
> +254 0770 906375 / 0713 601113
>
> "Kujikwaa si kuanguka, bali ni kwenda mbele" (To stumble is not to fall
> but a sign of going forward) - Swahili Proverb
>
> Sent from my iPad
>
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