I had a chance to mull over the same a couple of months ago. My understanding is, Safaricom understands that the tech market is undergoing a lot of drastic and dynamic changes. Actually we know nothing for the next day. And for that, they decided that whatever technology that works for them TODAY, they will deploy it. Buying Wimax companies was the first such decision since Wimax was the first such technology to be adopted enmasse. They wanted to built on something proven and tested, and not start from scratch. The fact is, LTE, 4G or Wimax are transmitting data at almost the same speeds, and thus there are no competing interests.
There is no reason to believe the market today will behave the same way tomorrow. Just a few days ago people were lining for the inZain sim cards, now im very such such sims are rotting somewhere on some rusty shelf. The net effect is that Safaricom ended up loosing maybe 10% or 20% of the revenue. inZain ended up bleeding 60-80% of revenue.
Now assuming Zain decide to enter the data market with such crazy prices, they will find a formidable competitor aka mother Bee, already established. I wish them well as they bleed to death. Remember Castle Brewing, Furnitureland, Metro Cash & Carry etc. They tried to undercut Kenyan competitors. Kenyans have unique habits, and Safaricom knows it. Ni masaa ya kubamba.
Peter
On Thu, Sep 2, 2010 at 12:48 PM, Odhiambo Washington
<odhiambo@gmail.com> wrote:
On Thu, Sep 2, 2010 at 10:01 AM, David Kiania | Asentric Consulting Ltd
<kianiadee@gmail.com> wrote:
It is obvious by no that early market entry means nothing, success or failure is determined by the ability to defend your market share. At the current pricing, I am certain that safcom can wrestle marketshare from the likes of Accesskenya, Wananchi etc but will not be able to defend it
I can bet my life on the fact that once Airtel Kenya goes into data, the whole scenario is going to change, and we can't predict that!
Suppose Airtel goes crazy and gives "unlimited 3G" at, say, KES 5,000 per month, will Safcom still compete? Safcom has nothing like unlimited on 3G or does it? Airtel is quite capable of pulling such a fast one, given what they did recently. We'll probably see another "bend over".