[kictanet] Consumer protection a means of cutting Safaricom’s dominance
Nelson J kwaje
nelson at web4all.co.ke
Thu Feb 23 09:38:59 EAT 2017
Not trying to be too simplistic, but this cartoon
<http://gadocartoons.com/safcom-dominance/?utm_content=buffer6c463&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer>
says a lot about what is happening in this market. #Safcom_dominance.
http://gadocartoons.com/safcom-dominance/?utm_content=buffer6c463&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer
Nelson Kwaje
Team Leader
WEB4ALL Ltd
On 22/02/2017 01:53 WB, Erick Mwangi via kictanet wrote:
>
> Well Kanini being restrained and dominating are good things given in
> equal measure - pun intended!!
>
> Research has shown that several factors influence a company’s ability
> to retain market leadership, among them technological innovation,
> changes in market structure, short product life cycles, capital
> strength and promotional prowess. However, one critical factor has
> largely been ignored: the psychological forces that drive decisions
> consumers make and, specifically, the degree to which people feel they
> have choices. Once people have learned a company’s unique technology
> interface, they become more efficient using that interface and are
> often reluctant to switch to competing products that require new
> skills or allow for only limited transfer of current skills. As
> companies such as Microsoft have demonstrated with its Windows
> operating system and Office software, early movers with dominant
> market shares are in an ideal position to provide customers with
> interface-specific experience that creates this type of competitive
> advantage.
>
> Studies have shown that once consumers learn to use a particular
> interface, they are reluctant to switch.
>
> Psychological reactance works like this: As people learn to use a
> particular electronic interface associated with information search or
> online shopping, for example, they often become locked in and develop
> extremely high levels of loyalty even when otherwise equivalent
> competitors are available; the cost of switching outweighs the benefit
> of using another product. However, research indicates that the depth
> of loyalty weakens when consumers feel that their freedom to choose is
> restricted. Specifically, as people feel that their choice is
> constrained and that one interface dominates the market, they react
> against the constraint by turning away from the market leader’s
> offering, thereby subjecting themselves to the associated costs of
> switching.
>
> This also the reason why Microsoft, invested $150 million in Apple in
> 1997 to ensure its survival (and thereby giving consumers a real
> choice in operating systems), this may have taken an important step
> toward maintaining its dominance in its core PC markets - well Safcom
> ball is in your court..
>
> A complex set of factors affects the choices that consumers make in
> rapidly evolving markets such as mobile apps, social networks and
> other emerging electronic interfaces. Aggressive players respond by
> focusing on product development, branding and rapidly gaining critical
> mass. research suggests that an important driver of consumer loyalty
> is the extent to which individuals feel that they have a choice in the
> interface they use, and that psychological reactance can have
> substantial effects on both consumer preferences and market shares.
>
> Behavioural analytics is becoming a key cog in understanding markets -
> this was used extensively used by Ted Cruz's campaign and later Trump,
> this will be an interesting phase we are getting into.
>
>
> E Njoroge Mwangi
> Technology| FINTECH | Big Data
>
> Cell +44 7539372742
> Skype: Erick.mwangi
>
> On Wed, Feb 22, 2017 at 9:54 AM, kanini mutemi via kictanet
> <kictanet at lists.kictanet.or.ke <mailto:kictanet at lists.kictanet.or.ke>>
> wrote:
>
> Not to be the forbearing wife in an abusive relationship (they run
> through my bundles too fast😡
> )
>
> Obtaining a dominant position isn't unlawful where the dominant
> position has been achieved genuinely through hardwork, superiority
> of products and services and an interplay of supply and demand.
> What is unlawful (See Section 24 of the Competition Act) is abuse
> of the dominant position. Our debate on whether or not Safaricom
> has a dominant position is futile. What we should interrogate is
> whether 1. the dominant position (assuming indeed the numbers
> affirm their dominance) was achieved unlawfully and 2. there have
> been instances of abuse of such position such as product tying (as
> the writer claims) and restrictive agreements. If the answer to
> this is yes then by all means let's have a conversation on
> equitable remedy and please, make those fines hefty. Again, we
> casually talk about unfair competition but in which market? There
> is a need to define the markets that Safaricom (and M-Pesa)
> operate in and see real figures on market share in these markets.
>
> It is very tempting to approach this topic emotionally and I think
> that's the trap the trial judge in US v Microsoft fell in when he
> ordered that Microsoft be split to two. Well in that case there
> were instances of abuse, I digress. Legislative (see Midiwo's
> Bill) and regulatory efforts may sound like a good idea now but
> what happens when our home grown companies finally make it? Will
> we subject them to similar vilification? I get the angle on
> consumer protection but is it really the consumer we are
> protecting or are we just mad that one company made it while
> others still struggle? I'd like us to graduate the discussion to
> whether a lot of what Safaricom does amounts to abuse of dominant
> position. For example- the new product by PharmAccess, M-Tiba.
> You're telling me that for me to get services from one product
> (M-Tiba) I have to subscribe for another product (Safaricom). Am I
> the only one for whom this raises red flags?
>
> Tarehe Jumatano, Feb 22, 2017 saa 12:22 Twahir Hussein Kassim via
> kictanet <kictanet at lists.kictanet.or.ke
> <mailto:kictanet at lists.kictanet.or.ke>> aliandika:
>
> Interesting debate…
>
> I would agree with Ali on nurturing the */ndogo-ndogos/* (read
> zukus, jamiis etc) that are upcoming. However I would rather
> let the */bwana kubwa/* – Safcom be, the market has a way to
> trim */bwana kubwa/* to size – Nokia is a good example.
>
> *From: *Walubengo J via kictanet
> <mailto:kictanet at lists.kictanet.or.ke>
> *Sent: *Wednesday, February 22, 2017 11:29 AM
> *To: *twahuq at gmail.com <mailto:twahuq at gmail.com>
> *Cc: *Walubengo J <mailto:jwalu at yahoo.com>
>
>
> *Subject: *Re: [kictanet]Consumer protection a means of
> cutting Safaricom’s dominance
>
> @Barrack,
>
> Unlike columnist Jaindi, i dont have the benefit of the leaked
> dominance report. So unable to confidently take a position on
> the report.
>
> However, I partly agree with Ali that the market has changed
> since the KPTC days (of the 1990s). Safaricom, just like
> Airtel and others may have been telecommunication companies
> then, but today they are more of ICT companies than they are
> traditional telcos (read voice providers).
>
> The regulatory instruments and parameters for managing telcos
> in the 90s/early 2000s are therefore inadequate in dealing
> with todays dynamic ICT/Internet environment. There is need to
> have new regulatory instruments that can adequately
> interrogate todays ICT markets.
>
> So once I get the dominance report, I would be keen to
> understand whether the Consultants recommendations are
> informed by a telco-focused regulatory instruments or are
> based on the new ICT realities. So in answering @Barrack, it
> is difficult to tell whether splitting Safcom is good or not,
> unless we understand what were the methodologies used to
> arrive at such decisions.
>
> So I hope Racheal/CA will give us the detailed official report
> sooner, rather than later.
>
> walu.
>
> *From:*Ali Hussein via kictanet <kictanet at lists.kictanet.or.ke
> <mailto:kictanet at lists.kictanet.or.ke>>
> *To:* jwalu at yahoo.com <mailto:jwalu at yahoo.com>
> *Cc:* Ali Hussein <ali at hussein.me.ke
> <mailto:ali at hussein.me.ke>>; KICTAnet ICT Policy Discussions
> <kictanet at lists.kictanet.or.ke
> <mailto:kictanet at lists.kictanet.or.ke>>
> *Sent:* Wednesday, February 22, 2017 6:18 AM
> *Subject:* Re: [kictanet] Consumer protection a means of
> cutting Safaricom’s dominance
>
> 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 <tel:+254%20713%20601113>
>
> Twitter: @AliHKassim
>
> Skype: abu-jomo
>
> LinkedIn: http://ke.linkedin.com/in/alihkassim
> <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 <mailto: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
> <mailto: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
> <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 <tel:+254%20713%20601113>
>
> Twitter: @AliHKassim
>
> Skype: abu-jomo
>
> LinkedIn: http://ke.linkedin.com/in/alihkassim
> <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
> <mailto: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 <http://twitter.com/lordmwesh>
>
> On 21 February 2017 at 23:48, Grace Githaiga via
> kictanet
>
> <kictanet at lists.kictanet.or.ke
> <mailto: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
> <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
> <mailto:ggithaiga at hotmail.com>
>
> Linkedin:
> https://www.linkedin.com/in/gracegithaiga
> <https://www.linkedin.com/in/gracegithaiga>
>
> www.kictanet.or.ke <http://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
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> in ICT policy and regulation. The network aims to act as a
> catalyst for reform in the ICT sector in support of the
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> enabled growth and development.
>
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>
> 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.
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