[kictanet] Safaricom battling pricing power with CA
jgmbugua at gmail.com
Tue Jan 25 08:58:43 EAT 2022
What figure internally has Safaricom been working with given that an MTR
reduction was inevitable? The last cut was in 2015, before that, I think it
was in 2010, that precipitated the great tariff wars. I seem to recall that
some chaps called Analysis Mason were called in to carry out a study. My
question is, based on the LRAIC (long run average incremental costs) model,
what figure does Safaricom come up with?
+254 721 321819
On Tue, Jan 25, 2022 at 8:19 AM Ali Hussein via KICTANet <
kictanet at lists.kictanet.or.ke> wrote:
> 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
> My two cowrie shells.
> *Ali Hussein*
> Fintech | Digital Transformation
> Tel: +254 713 601113
> Twitter: @AliHKassim
> Skype: abu-jomo
> LinkedIn: 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 ...
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> interested and involved in ICT policy and regulation. KICTANet is a
> catalyst for reform in the Information and Communication Technology sector.
> Its work is guided by four pillars of Policy Advocacy, Capacity Building,
> Research, and Stakeholder Engagement.
> 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.
> KICTANet - The Power of Communities, is Kenya's premier ICT policy
> engagement platform.
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