Popular Posts

Monday, September 6, 2010

How to Get the Best out of the Telecommunications Industry

Call it mobile price wars or liberalization of the telecommunications market, call it the clamour for subscribers or a maturing market. One thing is for sure; the Kenyan telecommunications sector has been rattled and the snakes have had to respond. And respond they have.

It all started with a reduction of interconnection rates by the Communications Commission of Kenya (CCK), from 4.42 shillings to 2.21 shillings.

Of course not anybody expected the response to be as instantaneous and almost as spectacular as it came. I believe even CCK were stunned at the swiftness at which Zain in particular moved to extend the reduction costs to the end user, the subscribers. Aren’t we all used to cases where companies, like Matatu touts, are always already too willing to adjust prices upwards when the situation calls for such a move, while they would drag their feet and offer all manner of excuses when the situation calls for a reduction?

Zain has been burning its midnight oil, throwing in promotions after another, even changing its brand name from one to another in its pursuit to get at least a respectable part of the subscriber base that Safaricom has held for far too long. None of the efforts have bore any fruit.

The same, if not less, can be said of the other players. In a market that has four players, the competition can still only be referred to as monopolistic as neither Zain nor any of the other players in Yu and Orange/Telkom have done enough to slow the pace of Safaricom’s growth. 

The fact that Safaricom is listed in the Nairobi Stock Exchange with such a large shareholder base, able to refinance the company in times of financial strain just complicates the whole mathematics for its competitors. This is without mentioning the biilions of shillings the company gets through its revolutionary M-Pesa transactions. However, with Zain, once called Kencell then Celtel and soon to be called Barti lowering its on-net and off-net calls to a stable 3shillings, Safaricom had to respond though this was not guaranteed. But when they responded, their response didn’t stir up the market as such. Under ‘the more you top up, the less your calling rate’ promotion, Safaricom tried but rarely knocked subscribers - who were already lining up for Zain lines - off their feet.

What ensued were pent-up newspaper adverts which attacked in innuendo competing companies while verbal exchanges also dominated the air as Zain accused the market leader (read Safaricom) of sabotage. This, just like Yu and Orange slashing their call rates was entirely expected.

But with these networks having almost uniform rates, how do you get the best value for your money? Is it still advisable to have all the SIM cards? I believe so. Let me break this down.

For those with Safaricom SIM cards, you can retain it primarily for M-Pesa transactions. I know there are cheaper options with Zain’s Zap and Yu’s Yu Cash, but M-Pesa wins here simply because it has wide network of agents spread across the country. Zain is still playing catch-up but I believe it will take some time before they get there, while Yu is still a disgrace in the money transfer business.

You can also retain the Safaricom SIM card if you are one of those lucky Kenyans who can top up with 50 shillings or more. In such a case, it will be almost parochial switching to a Wonderful World, unless of course Safaricom’s promotion ends. Which brings me to the point of having Zain. Do you always mind about clear networks, or a constant calling rate with no terms and conditions? Do you care less about brand names? Then Kencell-Celtel-Zain-Barti-what-next is the better option. Here, you can be surefire of good promotions always coming your way but nothing like stability in brand name.

Yu equals chatting. Who said chatting is only available online? With Yu, your worry should be on your keypads longevity and whether your phone battery will survive the long hours of chatting. I don’t think per-second billing is quite convincing since the cumulative minute cost equals that of Zain.

And finally, Orange. If you are not a diehard aficionada of the Orange Democratic Movement who embraces everything orange, you can use Orange 3G for browsing. Orange is inarguably the cheaper option for those who want to browse at home through their modems, hence buying an Orange line wouldn’t be much of a waste.

Bottomline is, none of the existing mobile operators provide all these services in one, hence the need to still own at least one SIM card, registered. Thus, with Safaricom, Zain, Orange and Yu lines (you only need two twin-SIM handsets for to hook all of these), you are likely to get the best option in such a wonderful world of competition where the little things you do brings happiness forever.

Niko na SafaOraZainYucom!!

And That's thesteifmastertake!!