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Why safaricom must reduce its costs and expenditures to remain a viable stock in future
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radio
#11 Posted : Wednesday, September 08, 2010 10:58:20 AM
Rank: Veteran

Joined: 11/9/2009
Posts: 2,003
mv_ufanisi wrote:
Calling rates of 3/- to other networks and 2/- per minute within SCOM. Given 80% market is Safcom and 20% other weighted average cost per call will be 2.2/-. This translates to voice revenues of 19.6 billion assuming the volumes stay constant. Data and M-PESA revenues of 20 billion leads to total revenues of about 40 billion.
They would need to cut their costs by atleast half to record a profit of 10 billion. Tough to do and loss of jobs is likely.


Clearly, Safaricom are in trouble, BIG trouble. I wish they could lower their data charges before the battle gets to there.
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KulaRaha
#12 Posted : Wednesday, September 08, 2010 11:01:39 AM
Rank: Elder

Joined: 7/26/2007
Posts: 6,514
Data is the next battlefront...I hear Zain will be offering an unlimited monthly package for like 500 bob.

Business opportunities are like buses,there's always another one coming
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Pablo
#13 Posted : Wednesday, September 08, 2010 11:02:04 AM
Rank: Member

Joined: 3/17/2008
Posts: 567
Location: Nairobi
Being in cost management myself. Slaying that dragon of costs is as difficult as you can imagine. It is even more difficult if the costs are of a fixed nature esp. contractual (Staff, Rents etc)

Safaricom's cost structure I am sure includes at least 70% of its costs as being fixed. Here there is no short cut - A retrenchment and rationalisation is a must and I am seeing it happen within the next 3 months.
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newfarer
#14 Posted : Wednesday, September 08, 2010 11:09:18 AM
Rank: Elder

Joined: 3/19/2010
Posts: 3,505
Location: Uganda
Pablo wrote:

Safaricom's cost structure I am sure includes at least 70% of its costs as being fixed. Here there is no short cut - A retrenchment and rationalisation is a must and I am seeing it happen within the next 3 months.


True that.Pole to those who will be affected .Jipeni moyo.I hope the ecomony will be vibrant enough to create new jobs .

I also hope that lower calling rates will lead to cost savings in other companies in the economy and hence new job opportunities .

Already airtime selling agents have started reporting slow airtime sales.
punda amecheka
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Njung'e
#15 Posted : Wednesday, September 08, 2010 11:09:50 AM
Rank: Elder

Joined: 2/7/2007
Posts: 11,935
Location: Nairobi
@Kulahepi,
What??.....Are you sure?.

Nothing great was ever achieved without enthusiasm.
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  | | Edit by user: Wednesday, September 08, 2010 11:13 AM | Reason: Not specified
KulaRaha
#16 Posted : Wednesday, September 08, 2010 11:24:36 AM
Rank: Elder

Joined: 7/26/2007
Posts: 6,514
Njung'e,

There are rumours of a mega-low priced data package coming out of Zain soon. Perhaps expected to coincide with launch of 3G, which isnt too far away.

The number of 500 is also logical. Given the cost of cable mb, they would comfortably make money at 500 and probably woo a big part of the market.

Business opportunities are like buses,there's always another one coming
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  | | Edit by user: Wednesday, September 08, 2010 11:25 AM | Reason: Not specified
Njung'e
#17 Posted : Wednesday, September 08, 2010 11:35:48 AM
Rank: Elder

Joined: 2/7/2007
Posts: 11,935
Location: Nairobi
Chairman,
Huuu!!!....Maybe that's what Zain meant by "four more trump cards".Looks like time to start making a huge coffin for Safcom....wooooiiee!!
Nothing great was ever achieved without enthusiasm.
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sizzla
#18 Posted : Wednesday, September 08, 2010 11:49:20 AM
Rank: Member

Joined: 6/10/2006
Posts: 201
Location: Nairobi
Plus MJ insists that 2 bob is not sustainable...
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KulaRaha
#19 Posted : Wednesday, September 08, 2010 12:05:09 PM
Rank: Elder

Joined: 7/26/2007
Posts: 6,514
Njung'e wrote:
Chairman,
Huuu!!!....Maybe that's what Zain meant by "four more trump cards".Looks like time to start making a huge coffin for Safcom....wooooiiee!!


I think in the data war, Safcon will survive, but I see the likes of Access etc etc taking the brunt of the hit. Why pay them 5k a month for a line that is fixed, when you can have this?

Its just like voice, the target was Safcon yet the victim was Orange.
Business opportunities are like buses,there's always another one coming
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Allank
#20 Posted : Wednesday, September 08, 2010 12:10:02 PM
Rank: Member

Joined: 9/13/2006
Posts: 70
@ Kula Raha

500bob per month! hehehe tena 3G that will be a dream come true cant wait...Who needs 4G if you can get 3G at fairly reasonable prices? a wonderful world indeed
Kama kuoga ni usafi taulo lachafukani?
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