[kictanet] Safaricom shuts down cash for Bonga Points platform

Sat Nov 9 09:41:08 EAT 2013

True that @Ali on Market Failure.

We should not waste time trying to "fix" Safaricom. Safaricom behavior (right or wrong) is simply a manifestation of market failure.  Fix the "Market Failure" and you fix Safaricom behavior :-)

It's a Regulatory exercise...and I did blog about it a while back @

http://www.nation.co.ke/oped/blogs/Is-Safaricom-beyond-Regulation/-/634/1938156/-/yfqotr/-/index.html.

walu.

--------------------------------------------
On Fri, 11/8/13, Ali Hussein <ali at hussein.me.ke> wrote:

 Subject: Re: [kictanet] Safaricom shuts down cash for Bonga Points platform
 To: jwalu at yahoo.com
 Cc: "KICTAnet ICT Policy Discussions" <kictanet at lists.kictanet.or.ke>
 Date: Friday, November 8, 2013, 3:36 PM

 Kamotho,
 Walu, Mwangi and all
 Good points all. Lets address separate
 issues:-
 Market FailureAccording to Wikipedia this
 means:-Market
 failure is a concept within economic theory
 describing when the allocation of goods and services by
 a free
 market is notefficient.
 That is, there exists another conceivable outcome where a
 market participant may be made better-off without making
 someone else worse-off. (The outcome is not Pareto
 optimal.) Market failures can be viewed as scenarios
 where individuals' pursuit of pure self-interest leads
 to results that are not efficient – that can be improved
 upon from the societal point-of-view.[1][2] The
 first known use of the term by economists was in 1958,[3] but
 the concept has been traced back to the Victorian
 philosopher Henry
 Sidgwick.[4]
 Are we saying that the
 current situation in the Telco sector can be categorized as
 such? 
 I'm not a lawyer but as
 a business person I would humbly say
 yes. 
 I will leave the legal
 interpretation to my good friend John Omo at the CCK or
 Matano who I presume is in charge of competition and tariffs
 etc..
 Loyalty Programs
 In a sense loyalty programs are owned by the
 company/consortium that created and manages it.  So put
 in this narrow way Safaricom has the right and should have
 the right (remember that if something goes wrong on the new
 platform we will blame Safaricom not the company that
 created the trading platform) to protect its
 Brand. 
 That of course is Business
 1.0. 
 Business 2.0 and beyond calls for a more
 agile business sense and environment. That is why we
 expected Safaricom not to react in such a knee jerk way. But
 then that is their prerogative.. However, a little bird
 tells me we have not heard the end of this Bonga Points
 Saga. 
 Lastly for all of us doubters who are
 skeptical about Kenyan innovation I give you ONFON
 MEDIA.
 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
 On Nov 8, 2013, at 12:26 PM, Kamotho Njenga <kamothonjenga at gmail.com>
 wrote:

 Hussein,

 I do agree that the Bonga point scheme is a creation
 of Safaricom and they retain the right to regulate it. But
 there is a whole difference between regulation and muzzling
 of versatile innovations. As per the terms that Safaricom
 has made public (I may not know the hidden terms, now that
 they are hidden) Bonga points can be redeemed for rewards
 ranging from Talk-time 
 (Minutes), Data, SMS,  MMS bundles,  Merchandise
 from 
 Safaricom Retail Centres. They also state that you can
 "share and receive Bonga Points and redeem fantastic
 rewards." This simply means that I can share my bonga
 points with anyone as I wish. The person with whom I share
 my Bonga points may also choose to share some of his/her
 money or any other resource with me such that the matter is
 between willing parties. If Onfon Media realizes that we
 need an efficient system to enable us execute our sharing
 with utmost convenience, Safaricom has no business putting
 its nose in the private affairs of men. In any case let
 Safaricom or their next of kin state in specific terms any
 infringement that has been rendered on their systems or
 their so called terms and conditions. 

 The point here is that once I have incurred airtime
 expenses to accrue Bonga points through my line they belong
 to ME and not to Safaricom. Just in the same manner, 
 if you work for 30 days and salary becomes due, the employer
 is obliged to settle your account without resorting to the
 idle phrases of "terms and conditions". If
 Safaricom still wants to hang onto MY Bonga points then they
 are at liberty to withdraw their loyalty program at any time
 convenient to them. Or why would some one offer you a gift
 that you can not favorably enjoy? Its like being made to pay
 a huge dowry a very beautiful bride for marriage only to be
 told later that the terms and condition were that you are
 not supposed to share a bed, even at night.

 On Thu, Nov 7, 2013 at
 9:56 PM, Ali Hussein <ali at hussein.me.ke>
 wrote:

 Kamotho
 Can one argue that Bonga Points is a currently
 created by Safaricom and hence they have a right to sort of
 regulate its usage?

 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
 On Nov 7, 2013, at 7:43 PM, Kamotho Njenga <kamothonjenga at gmail.com>
 wrote:

 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 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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 The Kenya ICT Action Network (KICTANet) is a
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 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.