A similar problem arose in the US, but the regulator refused to let AT&T (the leading operator) buy off T-Mobile(the fourth operator). <div><br></div><div>What happened is that T-Mobile got a bit more creative in its offers (<a href="http://www.nytimes.com/2014/02/27/technology/personaltech/t-mobile-turns-an-industry-on-its-ear-in-a-fight-for-its-life.html?_r=0">http://www.nytimes.com/2014/02/27/technology/personaltech/t-mobile-turns-an-industry-on-its-ear-in-a-fight-for-its-life.html?_r=0</a>) . </div>
<div><br></div><div>I also think that Kenya is suffering from the same, especially seeing that we import the C level suite of most telcos to bring in "experienced people."</div><div><br></div><div>Perhaps, telcos need more of innovative people and less of experienced people - there isn't that much to lose anyway, or is there? <br>
<br>On Wednesday, 26 March 2014, Ali Hussein <<a href="mailto:ali@hussein.me.ke">ali@hussein.me.ke</a>> wrote:<br><blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
<div dir="auto"><div>Listers</div><div><br></div><div>Jaindi Kisero's article on the imminent departure (demise?) of two telcos in Kenya make compelling reading.</div><div><br></div><div><span><a href="http://www.nation.co.ke/oped/Opinion/mobile-phone-firm-pullout-market-failure/-/440808/2257472/-/2crh39/-/index.html" target="_blank">http://www.nation.co.ke/oped/Opinion/mobile-phone-firm-pullout-market-failure/-/440808/2257472/-/2crh39/-/index.html</a></span></div>
<div><span><br></span></div><div><span>The article basically explores the possibility that market failure is what we are experiencing in Kenya. </span></div><div><span><br></span></div><div><span>According to Wikipedia Market Failure</span><span style="background-color:rgba(255,255,255,0)"> </span><span style="background-color:rgba(255,255,255,0)">is a concept within economic theory describing when the allocation of goods and services by a</span><span style="background-color:rgba(255,255,255,0)"> </span><a href="http://en.wikipedia.org/wiki/Free_market" title="Free market" style="text-decoration:none;background-image:none" target="_blank">free market</a><span style="background-color:rgba(255,255,255,0)"> </span><span style="background-color:rgba(255,255,255,0)">is not</span><span style="background-color:rgba(255,255,255,0)"> </span><a href="http://en.wikipedia.org/wiki/Economic_efficiency" title="Economic efficiency" style="text-decoration:none;background-image:none" target="_blank">efficient</a><span style="background-color:rgba(255,255,255,0)">. That is, there exists another conceivable outcome where a market participant may be made better-off without making someone else worse-off. (The outcome is not</span><span style="background-color:rgba(255,255,255,0)"> </span><a href="http://en.wikipedia.org/wiki/Pareto_efficiency" title="Pareto efficiency" style="text-decoration:none;background-image:none" target="_blank">Pareto optimal</a><span style="background-color:rgba(255,255,255,0)">.) Market failures can be viewed as scenarios where individuals' pursuit of pure self-interest leads to results that are not efficient – that can be improved upon from the societal point-of-view.</span>^{<a href="http://en.wikipedia.org/wiki/Market_failure#cite_note-1" style="text-decoration:none;background-image:none" target="_blank">[1]</a>}^{<a href="http://en.wikipedia.org/wiki/Market_failure#cite_note-krugman-2" style="text-decoration:none;background-image:none" target="_blank">[2]</a>}<span style="background-color:rgba(255,255,255,0)"> </span><span style="background-color:rgba(255,255,255,0)">The first known use of the term by economists was in 1958,</span>^{<a href="http://en.wikipedia.org/wiki/Market_failure#cite_note-Bator-3" style="text-decoration:none;background-image:none" target="_blank">[3]</a>}<span style="background-color:rgba(255,255,255,0)"> </span><span style="background-color:rgba(255,255,255,0)">but the concept has been traced back to the Victorian philosopher</span><span style="background-color:rgba(255,255,255,0)"> </span><a href="http://en.wikipedia.org/wiki/Henry_Sidgwick" title="Henry Sidgwick" style="text-decoration:none;background-image:none" target="_blank">Henry Sidgwick</a><span style="background-color:rgba(255,255,255,0)">.</span>^{<a href="http://en.wikipedia.org/wiki/Market_failure#cite_note-Medema-4" style="text-decoration:none;background-image:none" target="_blank">[4]</a>}<p style="margin:0.4em 0px 0.5em">
<span style="background-color:rgba(255,255,255,0)">Market failures are often associated with <a href="http://en.wikipedia.org/w/index.php?title=Time-inconsistent_preferences&action=edit&redlink=1" title="Time-inconsistent preferences (page does not exist)" style="text-decoration:none;background-image:none" target="_blank">time-inconsistent preferences</a>,^{<a href="http://en.wikipedia.org/wiki/Market_failure#cite_note-5" style="text-decoration:none;background-image:none" target="_blank">[5]</a>} <a href="http://en.wikipedia.org/wiki/Information_asymmetry" title="Information asymmetry" style="text-decoration:none;background-image:none" target="_blank">information asymmetries</a>,^{<a href="http://en.wikipedia.org/wiki/Market_failure#cite_note-6" style="text-decoration:none;background-image:none" target="_blank">[6]</a>} <a href="http://en.wikipedia.org/wiki/Market_structure" title="Market structure" style="text-decoration:none;background-image:none" target="_blank">non-competitive markets</a>,<a href="http://en.wikipedia.org/wiki/Principal%E2%80%93agent_problem" title="Principal–agent problem" style="text-decoration:none;background-image:none" target="_blank">principal–agent problems</a>, <a href="http://en.wikipedia.org/wiki/Externalities" title="Externalities" style="text-decoration:none;background-image:none" target="_blank">externalities</a>,^{<a href="http://en.wikipedia.org/wiki/Market_failure#cite_note-Laffont-7" style="text-decoration:none;background-image:none" target="_blank">[7]</a>} or <a href="http://en.wikipedia.org/wiki/Public_goods" title="Public goods" style="text-decoration:none;background-image:none" target="_blank">public goods</a>.^{<a href="http://en.wikipedia.org/wiki/Market_failure#cite_note-8" style="text-decoration:none;background-image:none" target="_blank">[8]</a>} The existence of a market failure is often the reason for government intervention in a particular <a href="http://en.wikipedia.org/wiki/Market" title="Market" style="text-decoration:none;background-image:none" target="_blank">market</a>.^{<a href="http://en.wikipedia.org/wiki/Market_failure#cite_note-9" style="text-decoration:none;background-image:none" target="_blank">[9]</a>}^{<a href="http://en.wikipedia.org/wiki/Market_failure#cite_note-rees-10" style="text-decoration:none;background-image:none" target="_blank">[10]</a>} Economists, especially <a href="http://en.wikipedia.org/wiki/Microeconomics" title="Microeconomics" style="text-decoration:none;background-image:none" target="_blank">microeconomists</a>, are often concerned with the causes of market failure and possible means of correction.^{<a href="http://en.wikipedia.org/wiki/Market_failure#cite_note-mankiw-11" style="text-decoration:none;background-image:none" target="_blank">[11]</a>} Such analysis plays an important role in many types of <a href="http://en.wikipedia.org/wiki/Public_policy_(law)" title="Public policy (law)" style="text-decoration:none;background-image:none" target="_blank">public policy</a> decisions and studies. However, some types of government policy interventions, such as taxes, subsidies, <a href="http://en.wikipedia.org/wiki/Bailout" title="Bailout" style="text-decoration:none;background-image:none" target="_blank">bailouts</a>, wage and price controls, and regulations, including attempts to correct market failure, may also lead to an inefficient allocation of resources, sometimes called <a href="http://en.wikipedia.org/wiki/Government_failure" title="Government failure" style="text-decoration:none;background-image:none" target="_blank">government failure</a>.^{<a href="http://en.wikipedia.org/wiki/Market_failure#cite_note-weimervining-12" style="text-decoration:none;background-image:none" target="_blank">[12]</a>} Thus, there is sometimes a choice between imperfect outcomes, i.e. imperfect market outcomes with or without government interventions. But either way, if a market failure exists the outcome is not <a href="http://en.wikipedia.org/wiki/Pareto_efficiency" title="Pareto efficiency" style="text-decoration:none;background-image:none" target="_blank">Pareto efficient</a>. Mainstream neoclassical and Keynesian economists believe that it may be possible for a government to improve the inefficient market outcome, while several <a href="http://en.wikipedia.org/wiki/Heterodox_economics" title="Heterodox economics" style="text-decoration:none;background-image:none" target="_blank">heterodox</a> schools of thought disagree with this.^{<a href="http://en.wikipedia.org/wiki/Market_failure#cite_note-n._gregory_mankiw-13" style="text-decoration:none;background-image:none" target="_blank">[13]</a>}</span></p>
<p style="margin:0.4em 0px 0.5em"><span style="background-color:rgba(255,255,255,0)"><br></span></p><p style="margin:0.4em 0px 0.5em"><span style="background-color:rgba(255,255,255,0)">While Creative Destruction alludes to free-market economics as a description of processes such as downsizing in order to increase the efficiency and dynamism of a company or economy.</span></p>
<p style="margin:0.4em 0px 0.5em"><span style="background-color:rgba(255,255,255,0)"><br></span></p><p style="margin:0.4em 0px 0.5em"><span style="background-color:rgba(255,255,255,0)">The case of Orange and yu in my humble opinion is the stuff of Business School studies at Strathmore and others for years to come.</span></p>
<p style="margin:0.4em 0px 0.5em"><span style="background-color:rgba(255,255,255,0)"><br></span></p><p style="margin:0.4em 0px 0.5em"><span style="background-color:rgba(255,255,255,0)">The questions that the country now needs to ask include:-</span></p>
<p style="margin:0.4em 0px 0.5em"><span style="background-color:rgba(255,255,255,0)"><br></span></p><p style="margin:0.4em 0px 0.5em"><span style="background-color:rgba(255,255,255,0)">1. How will the demise of two major multinationals in Kenya going to affect the country's FDI outlook? Kenya is quickly gaining a reputation as a graveyard for MNCs who come here without appreciating the GLOCAL Principle.</span></p>
<p style="margin:0.4em 0px 0.5em"><span style="background-color:rgba(255,255,255,0)">2. What are the market dynamics that are going to be unleashed by a a defacto duopoly that now exists?</span></p><p style="margin:0.4em 0px 0.5em">
<span style="background-color:rgba(255,255,255,0)">3. What impact will it have going forward on the attractiveness of Kenya as a destination for tech giants and Startups alike?</span></p><p style="margin:0.4em 0px 0.5em">
<span style="background-color:rgba(255,255,255,0)">4. Is the regulatory environment being optimally executed to protect both investors and consumers alike? </span></p><p style="margin:0.4em 0px 0.5em"><span style="background-color:rgba(255,255,255,0)">5. Lastly - the more things change the more they remain the same? Seriously. The way this is going I won't be surprised if Airtel also throws in the towel seeing as they haven't turned a profit since their entry into the country.</span></p>
<p style="margin:0.4em 0px 0.5em"><span style="background-color:rgba(255,255,255,0)"><br></span></p><div><span><b>Ali Hussein</b></span></div><div><br></div><div style="font-family:Helvetica;font-size:medium">+254 0770 906375 / 0713 601113</div>
<div style="font-family:Helvetica;font-size:medium"><br></div><div><p style="margin:0in 0in 0pt"><span style="background-color:rgba(255,255,255,0)">Twitter: @AliHKassim</span></p><span style="background-color:rgba(255,255,255,0)"><font></font></span><p style="margin:0in 0in 0pt">
<span style="background-color:rgba(255,255,255,0)">Skype: abu-jomo</span></p><p style="margin:0in 0in 0pt"><span style="background-color:rgba(255,255,255,0)">LinkedIn: <a href="http://ke.linkedin.com/in/alihkassim" target="_blank">http://ke.linkedin.com/in/alihkassim</a><a href="http://ke.linkedin.com/in/alihkassim" target="_blank"><span style="text-decoration:none"></span></a></span></p>
<span style="background-color:rgba(255,255,255,0)"><font></font></span><p style="margin:0in 0in 0pt"></p><font><span style="background-color:rgba(255,255,255,0)">Blog: <a href="http://www.alyhussein.com/" target="_blank">www.alyhussein.com</a></span><br>
</font></div><div><span><br></span></div><div>"I fear the day technology will surpass human interaction. The world will have a generation of idiots".  ~ Albert Einstein</div><div><span><br></span></div><span>Sent from my iPad</span></div>
</div></blockquote></div><br><br>-- <br>with Regards:<div><br><div><a href="http://www.denniskioko.com/" target="_blank">blog.denniskioko.com</a><div><div><br></div></div></div></div><br>