6 Reasons why you should support Safaricom against CCK and the other Cowards(Zain, Orange, Yu)

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If you have ever stepped? into business school then i guess you understand what free market means. Even without going that far a layman on the Nairobi street can precisely tell you what Free Market is all about. Business governed by the laws of supply and demand, not restrained by government interference, regulation or subsidy. So what do we have in Kenya specifically on telcoms industry, is it a free market or? controlled market?? Many will agree that for sometime it has been? free and that is why i still don’t understand the thinking behind CCK introduction of the outdated draconian regulations, which from the face of it are aimed at taming Safaricom. Why would the Government go after? Safaricom one of the Kenyan outstanding success story? There are many theories being put forward to try to explain Government bizarre behavior. The most shocking one is to do with Orange. It had emerged that Orange in their rush to acquire Telkom Kenya bought a shell company and only realized that much later and now demanding compensation from the Government. Why they did a shoddy due diligence is a story for another day.? Government probably on their bid to pay orange let called in kind is looking for ways to provide them with competitive advantage over the dominant market leader Safaricom. Even if that is not the case there still many reasons why Kenyans should support Safaricom against CCK and the other cowards (Yu, Orange, Zain). I know as a write this the government has promised to review the regulations but that will take time and meanwhile the others are enjoying and that is why Zain has acted immediately by cutting their prices by 50%.? Below are the six of the best:

  1. If there is anything like teachable transformation in Business then Safaricom offers the best example. A clear case of the leadership at its best and the successful transformation of the company from a moribund department of? a ghost Telkom Kenya to arguably Kenya?s most successful company. We should all want to see more of such or don’t we?
  2. CCK might have been encouraged by the public desire to see Safaricom reduce their charges to the same level as others in particular the cross network calling rates. I hear many people complaining about Safaricom, yours truly included sometime,? ohoo Safaricom have high charges, ohoo Safaricom this, Safaricom that but it is funny that the same people stick with Safaricom giving it its dominant position in Kenyan market. With free choice, people are free to move to other networks.? Safaricom should not be blamed for being loved by the public, ok this one is not even love, i would call it the? borderline between love and hate, like people in a relationship or marriage
  3. Most countries encourage their businesses to be innovative, US pride itself as the Leader of innovation for many years and now worried that the other countries like India China and even South Korea are catching up. It is funny that in our case the government is trying to punish our King of innovation. Reason, because it is successful. The World Economic Forum publishes an annual comparison of each country’s innovativeness. In the end there is believe that innovation starts with the firms or companies? and it fuels not just the prosperity of firms but of nations.? If you read many articles blogs or even international media about Africa rising, the most talked about success story is in Kenya Safaricom Mpesa. One of the? reasons why many people stick with Safaricom despite the problems, is bacause they use? MPESAa lot for many transactions here and there
  4. Free market rewards those who are patient and savvy. Zain, back then when it was called Kencell was the market leader, but due to lack of foresight they took a disastrous route which allowed Safaricom to take advantage and? the rest are history. The government should allow those companies which? are run by smart people to thrive while the rest to die natural death.
  5. If you run a company or business, or you are a businessman/woman or planning to be one in future then the last thing you should allow is the government to control market price of anything. Doing so is like breeding monster which could turn on you one day and you would not know how to control it. Government are run by politicians and they love power, power to control anything which they can lay their hands on and they are never a shamed of it.
  6. Anybody who want a strong competitor to be punished for being strong is simply a coward. Why do? Zain, Yu and Orange want help instead of facing Safaricom man to man or woman to woman?

There are many voices supporting Safaricom and the following are some of them:

Jaindi Kisero wrote

I don?t agree that a CEO of a mobile company must first seek approval from the CCK whenever he wants to introduce the latest version of ?Bonga points? or ?Okoa Jahazi?, or seek approval when a marketing promotion should stand and end.

Make no mistake. I am not opposed to regulation of monopolistic behaviour. Nor am I opposed to the control of abuse of dominant market power.

But the price control regime the government is trying to introduce for mobile phone companies is anachronistic.

Nation Editorials: Telcom regulator must be fair to all

Where there is clearly one dominant player as prevails in the Kenya market, any efforts to redress the situation must not be implemented in a fashion that suggests the market regulator is trying to cut down a successful operator at the behest of those that have not managed to sell their services and products as effectively.

Standard looked at what this means for the investors

However, on the whole, we acknowledge today that Safaricom?s wealth is largely the product of human creativity in a liberalised market.

To be punished for this is to say to any potential investor that ours is a hostile market to free enterprise, where boardroom-tied bureaucrats can, with the stroke of a pen, render most of your investment and research worthless.

On Kara ( The Kenya Alliance of Resident Associations) have the opinion that CCK is being used by Safaricom rivals

What is not being said publicly about the saga, however, is that CCK is possibly being ?used? by Michael?s competitors to have a short cut to success. That shortcut entails bringing Michael?s outfit and products down. The kind of success one makes by eliminating his or her competitor.

Moses Kemibaro wrote

From my perspective, the new regulations have both positive and negative aspects. On one hand, Safaricom is incredibly strong in terms of market leadership and business performance. However, they only achieved this position through innovation, sound business practices and being market-focused. They also invested heavily and continuously offered a value proposition that was levels above the competition, which invariably let them grow their market share over the years to its current level.

Andrea Bohnstedt of ratio-magazine

There is no doubt that Kenya?s market structure is heavily skewed: Safaricom holds around 80% of the total market share. For customers and competition, this is clearly not an ideal situation. Yet the new regulations clearly offer little to address the critical question: How can the regulator fairly address this dominance without penalising the dominant operator for its achievements? Even in an environment with fewer governance problems than Kenya, these restrictions would add little value. Kenya, however, is notorious for entrenched corruption.

Startups in Kenya had this to say

Now, I’ll be honest I tried reading the regulations but I got bored, but if I’m to believe the arguments of CCK and Safaricom then I’m going to give this one to Safaricom. Why lie Safaricom deserves to be market leader. Not only have they cranked out great product after great product, they’ve done this while keeping their business very profitable using the “just good enough formula”.

On the other hand I know my friend Idd Salim has a different story to tell, basically supporting the move on his blog post Is Safaricom a cry-baby or are they being arm-twisted

At the same time a great discussion i had with? @Chiira @iFortKnox @Wamathai ended in a stalemate with two supporting and the other two opposing.

What is your opinion on the topic?
Kennedy Kachwanya
Lead Blogger at Kachwanya.com
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Kennedy Kachwanya is a technology blogger interested in mobile phones both smart and dumb, mobile apps, mobile money, social media, startups ecosystem and digital Savannah. New media must not forget the strength of old tech.
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