Thursday, March 10, 2011

I hate to admit this, but Safaricom is right

Please understand that this isn't easy for me to sit here and admit that our big green friend is right to resist efforts to regulate pricing for cross-network transfers. We all know how Safaricom has milked the 'Club effect' for years now, killing 2 birds with 1 stone i.e. on the one hand making supernormal profits from charging it's own customers exorbitant rates to call other networks and at the same time making them think that it is the 'other' networks fault. Well the focus has now shifted to money transfer with the smaller players agitating for cheaper cross-network transfers, basically an attempt to piggy-back on the vast network of mpesa agents i.e. it aims to make it cheaper for non-Safaricom customers to withdraw cash at mpesa counters. A number of prominent people have already spoken out in support of them and I grudgingly lend my voice to their chorus.
Just because Safaricom is the dominant player doesn't mean they don't deserve to enjoy the spoils of war. It was bad enough for them that the CCK succumbed to pressure on the 3G licence fees, now it seems they stand to lose the rewards from all the effort and resources they pumped into building their agent network. None of the smaller networks have had any real success recruiting/retaining their own agents, so they seem to have adopted the saying that goes something like '......why re-invent the wheel...' 

WHAT NEXT?

In school a long long time ago we were taught that the 'government has no business doing business'. It is worrying that  these days everywhere you look it seems like the voices of 'price control' activists in Kenya are getting louder by the day. Until now their attention has been focussed on fuel and food prices, but perhaps telco's are next in line. If indeed Kenya is serious about technology being the most significant driver of economic and social development then we must learn to allow innovation and initiative to be rewarded adequately. 

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