The government has been reviewing the interconnection rates constantly and I don't think what is happening in the market is a result of lowering this element of pricing. We all know safaricom was driving other players into losses like it has done to zain(kencel,celtel) using "club effect" and this issue had to be addressed. If safcom was willing to share its turf from the start, prices would make business sense at this time they would not be as low as they are. Its market dynamics playing its part and we have zain to thank. I don't think its wise forcing prices up but for the players to agree since all other players apart from safcom were dying a slow death. On the same note CCK is pushing for lower sms rates to not more than 2 KES by december. On 11/09/2010, Timothy Kyalo <this.gizmo@gmail.com> wrote:
I believe in market dynamics, demand and supply. Every company has a mission statement, core values and targets. If you are not in the organization I do not expect one to be in sync with these values. Every company has directors and management and these are the people in charge of making decisions for the company; remember Decisions consequences.
If the supply outnumbers the demand, economics dictates that the prices will go lower. OTOH if Saf/Bharti/Essar/Orange ship their profits to (UK+mobitelea)/India/India/France as these are the majority shareholders in this companies and I make a saving on my airtime purchases I am elated. I will not judge someone prematurely can anyone please expound on the cost per Erlang and it's retail and only then will we be in the know. I love all these companies and they all play a major role in this economy. Well for the likes of Essar and Orange(not Telkom) who entered the market on the later stages there achievement is very commendable.
If the government want to raise the interconnect fees because their investments(Saf and Telkom) profit margins have dipped. Well that's another story.
Safaricom does a lot in CSR, kudos. Well I'd be happy when I see this price war taken to the CSR front too. But I believe in this case the Market dynamics(demand/supply) will guide these price wars government or no government.
My thoughts
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