[kictanet] Safaricom shuts down cash for Bonga Points platform
Kamotho Njenga
kamothonjenga at gmail.com
Sat Nov 9 11:57:59 EAT 2013
Walu,
Point noted.
Going by the market shares, there is no significant difference between "the
market" and "Safaricom" from where I sit. The dominance becomes more
explicit as you move from data to voice to mobile money services. I
subscribe to the naive notion that by fixing Safaricoms shortcomings, you
are sincerely addressing the market failures. This is because other firms
in an industry tend to emulate their apparently "successful" brother. If
the firstborn is allowed to run amok, the siblings will also become rogue
as they grow up.
Alternatively if we say that we fix market failures, its not sufficient to
stop there. Let's demystify the term and highlight specific mechanisms of
dealing with the failures head on.
Kamotho
On Sat, Nov 9, 2013 at 9:41 AM, Walubengo J <jwalu at yahoo.com> wrote:
> 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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> 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.
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