Erick, Maybe in 2000 it was possible. Cant tell for sure if he was serious or fibbed on that one but pricesw in 2000 and prices now are miles apart. Generally I think he handled himself well. Doesn't strike me as the kind of man who can be talked into a fix! Message: 3 Date: Wed, 20 Oct 2010 17:00:44 +0300 From: Erick Njenga <eriknjenga@gmail.com> To: Skunkworks Mailing List <skunkworks@lists.my.co.ke> Subject: Re: [Skunkworks] Snippets from Michael joseph Reflections! Message-ID: <AANLkTikndiOUQxYV0Jg=pMKGcu8btR1hwPnJ2joPPn+_@mail.gmail.com> Content-Type: text/plain; charset="windows-1252" I streamed the talk and IMHO it was excellent. Just wondering out of curiosity which switch goes for 10m USD. On Wed, Oct 20, 2010 at 4:43 PM, Joel Musungu <nabiimfalme@gmail.com> wrote:

Skunk(ette)s,

He came, we saw and we heard and it was good.

It wasn?t raw and edgy but it was really insightful and eye/ear popping.

Here are a few snippets:

MJ Says:

?INHERITED TELKOM INFRastructure.

Old and almost useless network switch was in extelkoms house.

Zain started in feb then launched in august in august 2000 but

safaricom had been operational for some years and had a staff of 55

that he had to inherit.

5 new hires and 55 old safcom staff from tkl in norfolk towers flat

mj is an engineer

vodafone inv 20mill usd ata time when one switch was 10mill usd

Went with prepaid billing system because they couldn?t afford a

postpaid platform, in hindsight a good decision. The prepaid billing

platform was only 200kUSD

Billed per sec when per minute would have made more sense, gut

instinct made MJ choose per second billing even though he needed the

25% extra revenues that come from having a per Minute billing. A good

gut decision in hindsight though at that moment it was thought to be a

mistake to go per second.

He decided to hire 200 fresh out of campus to provide free customer

service- turned out to be a good decision as most people would not

read any manuals or handouts. They fielded as many calls about the

then Kencell as they did about their own service.

Bought low cost Motorola phones to start and it was almost a disaster

as they were overcharged and the service was low on the Moto end.

Launched on Oct 23rd 2000. On Monday following the network collapsed

due to an mimproperly configured database.

In june 2001 overtook kencell in market share. Needed to borrow more money.

Paperwork took a whole year to get the money. Shareholders wouldn?t

sign guarantees so the network was its own security guarantee.

Continued aggressive selling but lacked capacity to expand the network

while waiting for funds. This led to congestion.

Switch was paid and installed in 10 days.

Huge mistake:

? Awarded the loyal customers with a 200KES giveaway but due to

Dial UP from Dubai it went horribly wrong and people were up at 3am

calling and congesting the network for a whole 5 days network was super congested.

Lessons learned: do not surprise your customers and Use local based

companies as far as possible.

? Free calls after 9pm- another congestion causing fiasco starting

at 9.01 pm.

Safaricom has an R&D development team of over 40 members and a web

portal for ideas submission. Most of the local hits are not originally

kenyan ideas. Sambaza originated in Egypt and Sudan.

Mpesa was uk developed and coded by vodafone and rolled out in kenya

on a test basis as a proof of concept. This was done in Thika first

as a microfinance loan payback method but quickly expanded into its present role.

Support servers are based in UK and Frankfurt Germany.

Reached one million in 2003, 2mill 2004 and 16.5 million currently and

growing by half a million every month. Revenue is down by upto 40 %.

BTSs must payback max of 1yr or in 6 months unless they are wrongly

placed or are microwave only sites. Site by site revenue is reviewed

every six months in terms of originating and terminating revenue.

Safaricom has 60 green sites. Looking at new ways of cooling the

batteries by burying them as this is 25% of cost of running a BTS.

Originated revenue as well as terminated revenue are used to evaluate

a BTS location. 2600 base stations total and growing.. Physical

maintenance is outsourced. 5000 generators in the network to power

the BTS. Remote sites have high vandalism and security is a high

concern as they all cannot be manned sites.

Michael Joseph says

"Revenue share: safcom shud get the majority of the revenue share.

Our customer. Our distribution costs. Our infrastructure. We stand to

lose the most and gain the least in case you are not successfull.

Therefore we will have a great and better share of the revenue. In the

case of Skiza, we didnt believe the model will work therefore we gave

them a whole lions share of revenue but they had to invest all their

own funds and simply ride on our network. they are a great success and

a good example of where revenue share favours the other party."

"Mpesa is launching pay at the till at Uchumi supermarkets on Friday

22nd October. Retail banking is going to be a dinosaur in 10 years

time. MPesa is now the biggest form of paying school fees. Orange

money, YU cash and zap are thinking its about money but in truth it is

all about providing a service and profit will come in at its own time."

Average kenyan calls only 3.2 people so friends and family circle is

limited to 3.2. friends and family tariff will not work here hence the

tactical withdrawal of the tariff quietly by Orange.This is one way

orange made a huge mistake.

You must have a measured and tactile response to disruptive tactics

and that is why safaricom is slow and measured in responding to the

Price wars as they are playing out.

?

When the righteous Prosper, The City rejoices but when the wicked

perish there are shouts of JOY

_______________________________________________

Skunkworks mailing list

Skunkworks@lists.my.co.ke

http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks

------------

Skunkworks Rules

http://my.co.ke/phpbb/viewtopic.php?f=24 <http://my.co.ke/phpbb/viewtopic.php?f=24&t=94> &t=94

------------

Other services @ http://my.co.ke

-- Thanks and Regards, Erick Njenga Nyachwaya, M: +254-725-008-790 <http://www.facebook.com/ErickNjenga> <http://www.twitter.com/ErickNjenga>