The truck should not be assumed to belong to Zain until zain confirms it. This is the type of moves that are taken to trick the public sometimes. On Mon, Aug 23, 2010 at 6:15 PM, John Doe <fivepings@gmail.com> wrote:
Guys, what if Zains price is the lowest economically sustainable price? Safaricom can't go (sustainably) lower than that. And if they match Zain, then they still lose face.
I just wonder why we are all assuming that the guys at Bharti don't know what they are doing. They have been doing this succesfully in India. It is a game of largest volumes at the lowest possible price you can charge. Airtel is looking to boost its volumes.
All in all, my take is Safaricom will loose signinficant market share and Zain/Airtel wil gain significant market share. The winner here is you and I. Boy am I enjoying watching this unfold....
On Mon, Aug 23, 2010 at 4:08 PM, Odhiambo Washington <odhiambo@gmail.com>wrote:
On Mon, Aug 23, 2010 at 3:37 PM, Phares Kariuki <pkariuki@gmail.com>wrote:
For you to leverage an economy of scale, a prerequisite is a high number of customers/units produced. e.g. Toyota can leverage economies of scale, Maserati, not quite... Safaricom currently has the most subscribers, they can afford to have the lowest call tarriff... Zain, not so much... They don't have as many people on their network and have to maintain an equally large network, meaning that their cost per subscriber is actually *higher*... They will leverage said economies of scale if/when they have more subscribers on their network. For now, that's fairly heated air.
@Phares,
I will not comment on your second paragraph, but for the first, please 's/Zain/Bhart Airtel/g' and you'll see that what we are calling Zain here is not and as such Safaricom really needs to think. I am fearing for my shares at the NSE already. Safaricom should take courage and just think this out - they are not dealing with Zain anymore because it is not!
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