[kictanet] Consumer protection a means of cutting Safaricom’s dominance

Wed Feb 22 06:18:12 EAT 2017

Barrack

Im one of those old enough to remember. :-)

However my take is this:-

The markets have evolved so much and the dynamics of innovation, the market place and the consumer changed so much that the the Heavy Hand of Regulation must now be tampered by the light touch of nurturing and encouraging innovation and the market players to act and behave in a responsible manner. Failure to which the Market will deal with them in a most ruthless manner. The market won't break you up. It will decimate you and leave you for the dead. Just ask Telkom Kenya, Posta, Nokia and other once 'Dominant' global players.

I think we are focusing on the wrong things. By all means, keep a leash on the lean, mean fighting machine that is Safaricom. But also nurture home grown players -The PesaPals, the Cellulant, the WayaWayas, the Anganis, the Zuku's and Jamiis to ensure that we build such a deep bench of players that this Dominance conversation will be placed where it belongs - in the dustbins of history.

Ali Hussein
Principal
Hussein & Associates
+254 0713 601113 

Twitter: @AliHKassim
Skype: abu-jomo
LinkedIn: http://ke.linkedin.com/in/alihkassim

"We are what we repeatedly do. Excellence, therefore, is not an act but a habit."  ~ Aristotle

Sent from my iPad

> On 22 Feb 2017, at 5:27 AM, Barrack Otieno <otieno.barrack at gmail.com> wrote:
> 
> Hi colleagues,
> 
> I need an explanation like a two year old on this whole dominance
> debate. Maybe Walu can help me here. Safaricom was a subsidiary of
> Telkom Kenya focused on the mobile phone (GSM) Segment. Looking back
> into the past and as a result of Liberization, the then giant Kenya
> Posts and Telecommunications Corporation was split into , Telkom
> Kenya, Communications Authority of Kenya (CCK then as the regulator
> and Posta to handle the post office. We need to step back and
> interrogate the real reasons as to why Progress of Telkom Kenya and
> Posta has backfired in a maximum of ten bullet points. On the other
> hand, we also need to figure out how Safaricom (a subsidiary of Telkom
> Kenya which is now a public company bolted out of the stable and
> became a success). My simple questions:
> 
> 1. Will a split of Safaricom yield the desired effect?
> 2. Is it in the interest of Safaricom (the company or organization
> that is a legally recognized person by the laws of the land to split
> so as to suit the competition.
> 3. Can someone share case  studies of where this has worked before?
> 
> Walu or anyone as old as Kenya Posts and Telecommunication Corporation
> please help.
> 
> Following...
> 
>> On 2/22/17, Ali Hussein via kictanet <kictanet at lists.kictanet.or.ke> wrote:
>> @Mwendwa and all
>> 
>> it looks like that's what the consultant is suggesting.
>> 
>> Here are two other excerpts from the report that I find interesting:-
>> 
>> The most draconian of the prescriptions is the proposal to functionally
>> separate M-Pesa from Safaricom. This is tantamount to proposing a break-up
>> of Safaricom because in terms of growth revenues, M-Pesa is on track to
>> reach 50 per cent of the company’s net revenues. The consultants have also
>> proposed what they call “mandatory wallet-to wallet interoperability”, a
>> system where a consumer can keep cloud accounts across the platforms of
>> different mobile companies, making it possible to move and shift money
>> between accounts as one chooses.
>> 
>> I have said before and I'm happy to repeat this again. Separating M-Pesa
>> from Safaricom should not be forced on Safaricom. In my humble opinion
>> Safaricom should by now have done this voluntarily as a strategic imperative
>> to transform itself into the De-Facto National (Regional) Mobile Payment
>> System. I think the lost opportunity here can be seen by the KBA launching a
>> rival Mobile Platform called PesaLink.
>> 
>> The mandatory 'Wallet to Wallet' interoperability is an interesting angle
>> and needs to seriously be considered. This sort of compliments my point
>> above.
>> 
>> They have also recommended a system that they call “agent to agent
>> interoperability”, where agents will be able to support multiple mobile
>> money platforms using what is described in technical language as “a single
>> float”.
>> 
>> This is certainly interesting. In as much as this supports the notion of
>> 'User or Customer Experience'  I think the Regulator and the Telcos should
>> work towards ensuring this becomes a reality. In essence this could be a
>> solution to the allegations that Safaricom discourages its agent network
>> from dealing with rival Telcos.
>> 
>> Lastly, I would largely concur with Jaindi Ksero's conclusion (sort of) that
>> the Consultant has displayed a lack of knowledge in the functioning of our
>> national payments system. I would however like to add one for the road:-
>> 
>> Are our Regulators (CA, CAK and CBK)  prepared to empower, grow and regulate
>> with a light touch the seemingly fluid Telco, Banking, Payments and Fintech
>> Spaces while ensuring that:-
>> 
>> a) They embrace innovation and new thinking while protecting National
>> Interests and consumers at the same time?
>> 
>> b) They work together without resorting to Turf Wars as evidenced in the
>> tiff between the CA and the CAK in 2015.
>> http://www.businessdailyafrica.com/Corporate-News/Competition--telecoms-watchdogs-to-seek-truce-over-Safaricom-/539550-2707286-lqu5sez/index.html
>> 
>> c) They consider creating a Joint Task Force to monitor, encourage and
>> empower players in the spaces mentioned to become Regional and Global
>> Players? I have often wondered aloud about the CBK's core mandate of
>> protecting Depositors' funds and wondered (again aloud) whether this mandate
>> is outdated and that it should be expanded to that of becoming an empowering
>> public entity that encourages research, innovation and entrepreneurship in
>> the burgeoning convergence of Banking, Telcos, Payments and Fintech Spaces.
>> d) Regulatory tools need to be rebooted and upgraded to reflect the times.
>> The current scenarios are such that one doesn't even know anymore which
>> industry one operates in.
>> 
>> This is a plea for the Regulation Mandates to drastically change and embrace
>> the now and the future.
>> 
>> Can the Future Czars step up?
>> 
>> 
>> Ali Hussein
>> Principal
>> Hussein & Associates
>> +254 0713 601113
>> 
>> Twitter: @AliHKassim
>> Skype: abu-jomo
>> LinkedIn: http://ke.linkedin.com/in/alihkassim
>> 
>> "We are what we repeatedly do. Excellence, therefore, is not an act but a
>> habit."  ~ Aristotle
>> 
>> 
>> Sent from my iPad
>> 
>>> On 21 Feb 2017, at 11:12 PM, Mwendwa Kivuva via kictanet
>>> <kictanet at lists.kictanet.or.ke> wrote:
>>> 
>>> So technically, we want to break up Safaricom so that these companies
>>> can gain some traction  "Airtel, has made cumulative debt to date of
>>> Sh51 billion, according to latest audited accounts for the financial
>>> year 2015. Indeed, in the league of loss makers, only Kenya Airways,
>>> with their Sh54 billion lost in the most recent years, compares to
>>> Airtel. As a matter of fact, the numbers in the company’s annual
>>> accounts show that Airtel is insolvent and only surviving on life
>>> support from the parent company in India. Safaricom’s only other
>>> rival, Orange Telkom, has gone through exceedingly difficult trading
>>> and financial conditions over the past decade. This a firm that is
>>> technically insolvent. It has gone through several episodes of
>>> restructuring that have not materially changed its circumstances."
>>> ______________________
>>> Mwendwa Kivuva, Nairobi, Kenya
>>> twitter.com/lordmwesh
>>> 
>>> 
>>> 
>>> 
>>> On 21 February 2017 at 23:48, Grace Githaiga via kictanet
>>> <kictanet at lists.kictanet.or.ke> wrote:
>>>> 
>>>> Jaindi Kisero gives us a glimpse of the competition study in the
>>>> telecommunication sub-sector undertaken by Ms Analysys Mason on behalf
>>>> of
>>>> CA. See full article:
>>>> 
>>>> "I recently came across a report by the consulting group Analysys Mason
>>>> entitled "A telecommunication competition market study in Kenya".
>>>> Readers
>>>> will recall that these consultants were retained by the market regulator
>>>> –
>>>> the Communications Authority of Kenya – to conduct a study whose results
>>>> were to inform the crafting of a new framework for regulating abuse of
>>>> market dominance by the big players.
>>>> 
>>>> 
>>>> As expected, one of the key findings of this study is that Safaricom’s
>>>> market share in both the mobile communications and mobile money segments
>>>> far
>>>> exceed the thresholds where firms are typically presumed to be
>>>> dominant."
>>>> 
>>>> 
>>>> http://www.nation.co.ke/oped/Opinion/consumer-protection-a-means-of-cutting-safaricom-dominance/440808-3822560-jsmlpbz/index.html
>>>> 
>>>> 
>>>> 
>>>> Best regards
>>>> 
>>>> 
>>>> Githaiga, Grace
>>>> 
>>>> 
>>>> Co-Convenor
>>>> Kenya ICT Action Network (KICTANet)
>>>> Twitter:@ggithaiga
>>>> Tel: 254722701495
>>>> Skype: gracegithaiga
>>>> Alternate email: ggithaiga at hotmail.com
>>>> Linkedin: https://www.linkedin.com/in/gracegithaiga
>>>> www.kictanet.or.ke
>>>> 
>>>> "Change only happens when ordinary people get involved, get engaged and
>>>> come
>>>> together to demand it. I am asking you to believe. Not in my ability to
>>>> bring about change – but in yours"---Barrack Obama.
>>>> 
>>>> 
>>>> 
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>>> 
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>>> 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.
>> 
> 
> 
> -- 
> Barrack O. Otieno
> +254721325277
> +254733206359
> Skype: barrack.otieno
> PGP ID: 0x2611D86A
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