Listers I found this discussion interesting, interesting opinions from our brothers across the borders.<br><br>Kind Regards<br><br><div class="gmail_quote">---------- Forwarded message ----------<br>From: <b class="gmail_sendername">Timothy Kabaza</b> <span dir="ltr"><<a href="mailto:tkabaza@gmail.com">tkabaza@gmail.com</a>></span><br>
Date: Fri, Aug 27, 2010 at 9:57 AM<br>Subject: [i-network] Zain Kenya Crying Foul at Safaricom<br>To: I-Network Uganda <<a href="mailto:i-network@dgroups.org">i-network@dgroups.org</a>><br><br><br>Badru,<br><br>agreed from a purely free and competitive market environment. But it has never happened before anywhere in the world or in any industry? Why? Remember (Prof Micheal) Porter's five forces of competition
<ol><li><b> Existing competitive rivalry between suppliers</b></li><li><b>Threat of new market entrants</b></li><li><b> Bargaining power of buyers</b></li><li><b> Power of suppliers</b></li><li><b> Threat of substitute products (including technology
change)</b></li></ol>here in our region, the biggest distortion of competition is #4, the power of suppliers (operators), not # 1 because of the oligopolistic/cartel tendencies.<br><br>Hence my view that the regulators step in to protect the consumers. i am not advocating that the regulators protect the suppliers , NO, but to protect us, the consumers against the power of the suppliers.<br>
<br>The last time the market was left to the power of suppliers with a 'self regulating' regime ( at most with minimum regulation), we ended up with the global financial collapse - (we are still suffering from the same and we should expect further failures, bail outs notwithstanding!).<br>
<p>Tim<br></p><br><div class="gmail_quote">On 24 August 2010 14:24, Badru Ntege <span dir="ltr"><<a href="mailto:ntegeb@one2net.co.ug" target="_blank">ntegeb@one2net.co.ug</a>></span> wrote:<br><blockquote class="gmail_quote" style="border-left: 1px solid rgb(204, 204, 204); margin: 0pt 0pt 0pt 0.8ex; padding-left: 1ex;">
Tim<br><br>There's two schools of thought here in a market environment the best performer wins and takes the lion share. However it seems that when this happens we then call for big brother the regulator to come help the none performers. I think that is a wrong way towards building a sustainable industry. Those players who cannot handle should seek partners who can help them build a competitive business as opposed to hoping that the regulator will always help them out. <br>
<br>Regards<br><br>Badru<p>Sent from my® smartphone </p><hr><div><b>From: </b> "Timothy Kabaza" <<a href="mailto:tkabaza@gmail.com" target="_blank">tkabaza@gmail.com</a>>
</div><div><b>Date: </b>24 Aug 2010 11:58:30 +0200</div><div><b>To: </b>I-Network Uganda<<a href="mailto:i-network@dgroups.org" target="_blank">i-network@dgroups.org</a>></div><div><b>ReplyTo: </b> "I-Network Uganda" <<a href="mailto:i-network@dgroups.org" target="_blank">i-network@dgroups.org</a>>
</div><div><b>Subject: </b>[i-network] Zain Kenya Crying Foul at Safaricom</div><div><br></div>Precisely! <br><br>Remember what I contributed about interconnection charges and the resultant tariffs? I am of the view that regulators should take a strong stand in the interest of the users and pro-actively address the issue of tariffs across board. Perhaps the EAC Secretariat should include communication tariffs on the custom union agenda.<br>
<br>Tim <br><br><div class="gmail_quote">On 20 August 2010 06:48, Kiiza Edgar <span dir="ltr"><<a href="mailto:edgar212516@googlemail.com" target="_blank">edgar212516@googlemail.com</a>></span> wrote:<br><blockquote class="gmail_quote" style="border-left: 1px solid rgb(204, 204, 204); margin: 0pt 0pt 0pt 0.8ex; padding-left: 1ex;">
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<b><span style="font-size: 7pt; text-transform: uppercase; color: rgb(51, 51, 51);" lang="EN"></span></b> </div>
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<span style="text-transform: uppercase; color: rgb(51, 51, 51);" lang="EN"><font size="4">Zain accuses Safaricom of blocking calls</font></span></div>
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<b><span style="font-size: 7pt; text-transform: uppercase; color: rgb(51, 51, 51);" lang="EN">In Summary</span></b></div>
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<b><span style="font-size: 9pt; color: rgb(68, 68, 68);" lang="EN">What CCK says on competition</span></b><span style="font-size: 9pt; color: rgb(68, 68, 68);" lang="EN"></span></p>
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<span style="font-size: 10pt; color: rgb(68, 68, 68); font-family: Symbol;" lang="EN"><span>·<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> </span></span></span><span style="font-size: 8pt; color: rgb(68, 68, 68);" lang="EN">Commission says a competition study by PricewaterhouseCoopers will enable it identify the dominant companies, their price structure.<br>
Commission to apply a price cap on off-net tariffs </span></p>
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<span style="font-size: 10pt; color: rgb(68, 68, 68); font-family: Symbol;" lang="EN"><span>·<span style="font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; font-size: 7pt; line-height: normal; font-size-adjust: none; font-stretch: normal;"> </span></span></span><span style="font-size: 8pt; color: rgb(68, 68, 68);" lang="EN">It costs Sh0.01 to terminate SMS on mobile and fixed networks but the operators charge up to Sh3.50. The lowest is Sh2 per SMS. </span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">A mobile phone company on Thursday sensationally accused its competitor of sabotaging its customers’ calls as a business war looms in the industry.</font></span><span style="font-size: 8.5pt; color: rgb(51, 51, 51);" lang="EN"> </span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">Zain, which cut its calling charges by half on Wednesday, accused Safaricom of blocking its subscribers from calling the market leader’s numbers.</font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">The accusations came on the day the regulator announced a cut in the charges operators levy each other for calls across networks, setting the stage for cheaper calls.</font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">Now networks can only charge each other Sh2.21 a minute for calls and Sh0.01 for an SMS. Zain has already taken advantage and cut its calling rates to Sh3 and SMS to Sh1.</font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">But the company on Thursday said its subscribers were having problems making calls to Safaricom, because the bigger company was limiting the access of Zain callers into its network. </font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">In a complaint to the Communications Commission of Kenya, Zain claimed Safaricom was “abusing dominance” and asked CCK to intervene.</font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">“Our customers are experiencing congestion and call set-up issues when they call Safaricom and not when calling Zain. This is purely for the simple reason that our main competitor has been delaying the capacity increase request from our side to accommodate the incremental traffic coming from us after we launched our new offer in the market,” said Zain Kenya managing director, Mr Rene Meza.</font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">Safaricom dismissed Zain’s claims and instead accused its competitor of poor planning. Chief executive officer Michael Joseph said: “We feel that their request to the CCK to declare Safaricom dominant so soon after the launch of their new tariff is insincere, particularly as it was the result of poor planning on their side.” </font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">He added: “We have always been courteous to Zain, even to the extent of accommodating them when they were unable to clear the significant debt that they owed us. This notwithstanding, we shall continue to cooperate with them as guided by the inter-connect agreement and other industry rules. We invite them to engage us within those parameters.”</font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">Mr Joseph said Zain ‘’is fully aware of the procedures that all operators must adhere to when seeking to increase their inter-connect traffic capacity. Under the agreement the inter-connect pipe belongs to them and they should have upgraded it long before yesterday to accommodate their changed tariff plan.”</font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">The Consumers Federation of Kenya (Cofek), welcomed the drop in charges but asked CCK to ensure fair play in the sector. ‘‘We do hope that competition among service providers shall remain decent, honest and objective,’’ Cofek said in a statement signed by programme officer Calvin Otieno.</font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">The organisation also asked CCK to tackle the issue of low speeds and high charges for internet long after all major fibre optic cables landed in Kenya. CCK director-general Charles Njoroge said Zain’s allegations would be investigated.</font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">“We shall look into the complaints. We know there could be challenges when the traffic is changing patterns and the important thing is to investigate and once we have answers we shall be able to take corrective measures to ensure whatever is happening is corrected,” he said.</font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">Mr Njoroge, speaking at CCK offices, said as the market opens up there will be alignment in terms of efficiency, and operators should co-operate to ensure there is access because the interconnection agreements demand they facilitate seamless interconnection.</font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">He said CCK had noted the wide difference between what operators charge customers to make calls within their networks and to competing networks and how this was being used by the large operators to block competition. The big companies were creating a “club effect” by using interconnection charges to discourage their customers from calling other networks.</font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">“This pricing mindset is offensive to competition as it entrenches tariff imbalances in favour of large operators and makes other networks net payers to large networks,” he said. Mr Njoroge said the issue of dominance will be comprehensively dealt with through a report to be released soon. </font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">He said the interconnection charges could have gone down to Sh0.99 but CCK said this would disrupt business plans of the operators. The Sh2.21 had factored the return on investment, but added that the benefits must be passed to the consumers.</font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">“We need to move to the second step. We have initiated a process, and have regulations and once we declare (a company) dominant and it is seen that the company is abusing the dominance we shall come in and put a cap to regulate the retail (prices),” Mr Njoroge said.</font></span></p>
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<span style="color: rgb(51, 51, 51); font-family: 'Times New Roman','serif';" lang="EN"><font size="3">He said they had a competition study by PricewaterhouseCoopers which will enable them identify the dominant companies, their price structure and know if there is an abuse of the market. He said in order to remedy the competition problem at the retail fixed and mobile voice markets, the commission intends to apply a price cap on the off-net tariffs</font></span></p>
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