In the case of Safaricom, a good part of those 'superprofits' go back a) to the Kenyan state (and, if not detoured into MPs wild allowances, could be invested in e.g. roads and hospitals) and b) to the Kenyan investors. (never mind that you actually need to make money to be able to invest in new products and services - which will be to the benefit of consumers). <br>
<br>I think it's a bit myopic to just say the consumer doesn't care, or shouldn't care. Also, if we're having that kind of attitude, a discussion on a mailing list for ICT professionals really becomes moot, no? <br>
<br>So in terms of analysing a sector, the question still stands: How will Zain make money? Because if they don't eventually, then they won't survive. Which should be of some marginal interest for subscribers, too - and the company's employees. And if two out of the four shut shop, then the regulator might want to look at regulating for competition again. <br>
<br><br><br><div class="gmail_quote">On 30 August 2010 14:33, Jotham Kilimo Mwale <span dir="ltr"><<a href="mailto:jokilimo@yahoo.com">jokilimo@yahoo.com</a>></span> wrote:<br><blockquote class="gmail_quote" style="margin: 0pt 0pt 0pt 0.8ex; border-left: 1px solid rgb(204, 204, 204); padding-left: 1ex;">
<div><div style="font-family: times new roman,new york,times,serif; font-size: 12pt;"><div>I agree with Solomon. When I am buying my groceries, I look for the one who has what I can afford. I really do not try and rationalise whether they'll make profit or loss. I will not worry about that. I think the customer here is the winner. If Zain (Airtel) makes a loss but the customer gained, that's ok. If Safaricom's profits decrease to 15b next year due to this 'mess' but the customer gains, that's ok. If Yu and Orange close shop, their customers will move to the remaining networks, that's ok. Individual corporate board room decisions in reaction to the current and future environment will determine whether the operator loses or gains. I see the mobile phone customer at the threshold of a new dawn, a new dispensation, where exploitation by the operators (to make super profits)
will be a thing of the past.</div>
<div> </div>
<div>Regards,</div>
<div> </div>
<div>Jotham<br>No disclaimer!</div>
<div style="font-size: 12pt; font-family: times new roman,new york,times,serif;"><br><div class="hm">
</div><div style="font-size: 12pt; font-family: times new roman,new york,times,serif;"><div class="hm"><font face="Tahoma" size="2">
<hr size="1">
<b><span style="font-weight: bold;">From:</span></b> Solomon Mburu Kamau <<a href="mailto:solo.mburu@gmail.com" target="_blank">solo.mburu@gmail.com</a>><br><b><span style="font-weight: bold;">To:</span></b> <a href="mailto:jokilimo@yahoo.com" target="_blank">jokilimo@yahoo.com</a><br>
<b><span style="font-weight: bold;">Cc:</span></b> ke-users <<a href="mailto:ke-internetusers@bdix.net" target="_blank">ke-internetusers@bdix.net</a>>; KICTAnet ICT Policy Discussions <<a href="mailto:kictanet@lists.kictanet.or.ke" target="_blank">kictanet@lists.kictanet.or.ke</a>><br>
<b><span style="font-weight: bold;">Sent:</span></b> Mon, August 30, 2010 1:58:05 PM<br><b><span style="font-weight: bold;">Subject:</span></b> Re: [kictanet] [ke-internetusers] Zain Kenya makes another move<br></font></div>
<div><div></div><div class="h5"><br><span style="font-family: georgia,serif;">I always find ot interesting to see people always giving pessimistic views on an investment. I'm not a shareholder of either Safaricom or Zain, but find this trend welcome. Zain(Airtel) will make losses in the first round, but then, let's wait and see what they want to offer to the Kenyan market, as long as the consumer is the winner. </span><br style="font-family: georgia,serif;">
<span style="font-family: georgia,serif;">I don't think the consumer is worried about the losses Zain made, but he/she wants to communicate using the most affordable pricing in the market. The rest, to him, are just politics of the corporate world. </span><br>
<br>Me thinks <br><br>
<div class="gmail_quote">On 30 August 2010 13:37, Sam Gatere <span dir="ltr"><<a href="mailto:sam.gatere@gmail.com" rel="nofollow" target="_blank">sam.gatere@gmail.com</a>></span> wrote:<br>
<blockquote class="gmail_quote" style="padding-left: 1ex; margin: 0pt 0pt 0pt 0.8ex; border-left: 1px solid rgb(204, 204, 204);">Moaning about safaricom could be one of the strategies employed here... but we have to give a little grace to the dominant player where dealing with 15 million plus clients is no easy task! However it would also be important to look at the difference in mind set between Western Investors and those from the East. The former (West) have no problems making 10 bob profit per call while their counterparts seem not to mind making 50 cents! We also need to look at this whole price war from a birds eye view before narrowing down to Kenya. Airtel has 15 networks across the continent while Safaricom is only in Kenya. Should Airtel make Nairobi their Africa hub (of which I think it is) they will definitely up their game in by investing more to make their HQ a profitable one. Possibly We will see this war
move on to the Data arena in not to long.
<div><br></div>
<div>Sammy.<br>
<div><br></div>
<div><br></div>
<div><br>
<div class="gmail_quote">
<div>
<div></div>
<div>On Mon, Aug 30, 2010 at 12:50 PM, Andrea Bohnstedt <span dir="ltr"><<a href="mailto:andrea.bohnstedt@ratio-magazine.com" rel="nofollow" target="_blank">andrea.bohnstedt@ratio-magazine.com</a>></span> wrote:<br>
</div></div>
<blockquote class="gmail_quote" style="padding-left: 1ex; margin: 0pt 0pt 0pt 0.8ex; border-left: 1px solid rgb(204, 204, 204);">
<div>
<div></div>
<div>That's really the key issue, isn't it? They won't make money anytime soon - there's the low rates, but also the fact that they'll have to invest heavily in network and systems. Easy to moan about Safcom's customers service - but they manage 16m clients. I'm curious to see if Zain will grow their customer service at the same speed to accommodate all those new subscribers. <br>
<br>I also suspect that it'll be mostly very very price sensitive people who will change - again not the clientele that will earn the company much money. <br><br>In 2008, when Zain had the Vuka tariff (KES8 on and off net, if I remember correctly), the company made nearly USD90m losses. Last year, USD46m losses. <br>
<br>I found Mickael Ghossein's statement that 'the market is in a mess' quite telling. I suspect in this battle of the elephants, Orange and Yu are in most peril - which could easily contract the market again where subscribers have less choice. <br>
<br>Full
disclosure: I'm a client with both big companies. There's only so much a girl can put into her handbag. <br><br>
<div class="gmail_quote">
<div>
<div></div>
<div>On 30 August 2010 12:31, Wainaina Mungai <span dir="ltr"><<a href="mailto:wainaina@madeinkenya.org" rel="nofollow" target="_blank">wainaina@madeinkenya.org</a>></span> wrote:<br></div></div>
<blockquote class="gmail_quote" style="padding-left: 1ex; margin: 0pt 0pt 0pt 0.8ex; border-left: 1px solid rgb(204, 204, 204);">
<div>
<div></div>
<div>This is a very aggressive and most likely, a huge loss-making move in the short-run. I hope Zain has a well crafted (<i>sustainable</i>) longterm strategy.
<div><br></div>
<div>If they are simply 'playing politics' against a 78% market leader (Safaricom), then they will eventually price their way out of the Kenyan market.</div>
<div><br></div>
<div> Kencell losses <b>>>></b> Celtel losses <b>>>> </b>Zain losses <b>>>> </b>AirTel losses <b>>>> oblivion (or market leadership)</b><br>
<div><br></div>
<div>My opinion is not influenced by my 'Safaricom shareholder/MPESA user' status ;-)</div>
<div><br></div>
<div>Wainaina<br><br>
<div class="gmail_quote">On Mon, Aug 30, 2010 at 11:43 AM, Alex Gakuru <span dir="ltr"><<a href="mailto:gakuru@gmail.com" rel="nofollow" target="_blank">gakuru@gmail.com</a>></span> wrote:<br>
<blockquote class="gmail_quote" style="padding-left: 1ex; margin: 0pt 0pt 0pt 0.8ex; border-left: 1px solid rgb(204, 204, 204);">BY MICHAEL KARANJA<br>Updated 13 minutes ago<br><br>NAIROBI, Kenya, Aug 30 - Mobile telephony operator Zain Kenya has<br>
introduced Sh5 and Sh10 denomination airtime vouchers as it steps up<br>its efforts to capture the mass market.<br><br>The introduction of the new vouchers is seen as a move to make the<br>operator more accessible to the low-end market after a change in<br>
strategy following the entry of its new shareholders, Bharti Airtel.<br><br>Zain Kenya Managing Director Rene Meza said the move is aimed at<br>complementing its recent 50 percent reduction of call charges.<br><br>“We are offering a wide range of scratch card denominations to suit<br>
the needs of all individuals. Access to telecommunication services is<br>no longer a luxury but an integral part of each Kenyan’s<br>socio-economic needs,” Mr Meza
said.<br><br>....<br><br>Read more: <a href="http://www.capitalfm.co.ke/business/Kenyabusiness/Zain-Kenya-makes-another-move-4606.html#ixzz0y4pjzlUG" target="_blank">http://www.capitalfm.co.ke/business/Kenyabusiness/Zain-Kenya-makes-another-move-4606.html#ixzz0y4pjzlUG</a><br>
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