[kictanet] Safaricom battling pricing power with CA

[Ali Hussein]

Kivuva and listers

This is a very interesting case and could probably serve as a case study
worldwide. At this point in time I have more questions than answers:-

1. The Telco sector is an interesting one. Where do we draw the line
between Market Power, abuse of Market Power, Free Markets, centralized
control of power by Regulators? I can go on and on.

2. I can't help but wonder whether the current regulatory environment is
fit for purpose and whether the Telcos themselves are stuck in the '80s and
the regulator with them? Isn't it time to take into consideration that the
cheese is moving or has moved and that VOIP-type services have eaten into
the traditional voice market and these guys continue to fight for what's
remaining of the market? Has a study been done on what percentage of the
voice market is going to VOIP?

3. Are we fighting the wrong war?

4. Last but not least how do we as a country reason out without going to
court?

My two cowrie shells.

Regards

*Ali Hussein*

Fintech | Digital Transformation


Tel: +254 713 601113

Twitter: @AliHKassim

Skype: abu-jomo

LinkedIn: http://ke.linkedin.com/in/alihkassim
<http://ke.linkedin.com/in/alihkassim>




Any information of a personal nature expressed in this email are purely
mine and do not necessarily reflect the official positions of the
organizations that I work with.


On Mon, Jan 24, 2022 at 9:20 PM Mwendwa Kivuva via KICTANet <
kictanet at lists.kictanet.or.ke> wrote:

> Safaricom has a huge pricing power in voice services, making it difficult
> for rivals Airtel Kenya and Telkom Kenya to compete with it, the
> Communications Authority of Kenya (CA) has said.
>
> The regulator made the disclosure in its response to a case filed by
> Safaricom at the Communications And Multimedia Appeals Tribunal seeking to
> stop CA from cutting the mobile termination rate (MTR) per minute to Sh0.12
> from Sh0.99.
>
> MTRs are the charges levied by a mobile service provider on other
> telecommunications service providers for terminating calls on its network.
>
> Safaricom argues that the reduction of the charge, which was to take
> effect at the start of this year, ignores the cost of doing business in the
> telecommunications industry.
>
> The regulator responded by stating that the leading telco has the lowest
> cost of operations, allowing it to run promotions at prices below the MTR
> and which its rivals are not in a position to match.
>
> Safaricom’s leading market share has seen it charge its rivals more than
> it pays out to them, leaving it in a net profitable position.
>
> More ...
> https://www.businessdailyafrica.com/bd/corporate/companies/safaricom-pricing-power-revealed-in-tariff-battle-3691550
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