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Why safaricom must reduce its costs and expenditures to remain a viable stock in future

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VituVingiSana		#101 Posted : Friday, September 10, 2010 10:33:14 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,350 Location: Nairobi		GoK (was) bitching about high calling costs & data costs yet refuse to reduce taxes! 26% tax is too high... Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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Djinn		#102 Posted : Friday, September 10, 2010 10:39:15 AM
Rank: Elder Joined: 11/13/2008 Posts: 1,565		@VVS and KulaRaha.... I wrote "In Kenya this process was so BOTCHED and F--KED up in the 90s and early 00s. Telkom Kenya should ideally have been partially privatised at the same time as Kencell and Safaricom were licenced. It should have divested from Safaricom and got its own mobile licence " Essentially its a "sins of the father" kind of thing. It would be unethical of the present government to be so blase as say "we do not really care that the Moi govt f***ed the process up and left us with a problem child....lets take the investors money and run and thats it".... I think there could be really serious consequences all around. The French are a big investor in Kenya... Right now we cannot talk about taxes and Telkom Kenya being a bad entity....as of 2007 its NOT the same body. This is France Telecom as a main shareholder and with total management control. The GoK has a backseat (as it did in SCOM). However, it has certain commitments to uphold and obligations to its investors who came into the market on the premise that the playing field shall always be level as much as possible. Finally...if you have complained about your taxes...and if you are an investor in any sense....to let Telkom suffer is to let your past taxes and future taxes go to waste. Same thinking as the bail outs in the US - why did Obama not let the financial and automotive sectors die away? Anyone?
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KulaRaha		#103 Posted : Friday, September 10, 2010 10:45:42 AM
Rank: Elder Joined: 7/26/2007 Posts: 6,514		So you're saying we should ensure we keep Telkom alive so the French investment is secure? Business opportunities are like buses,there's always another one coming
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Djinn		#104 Posted : Friday, September 10, 2010 10:47:24 AM
Rank: Elder Joined: 11/13/2008 Posts: 1,565		VituVingiSana wrote: @djinn: Nice summary... flawed conclusion! Telkom Kenya is now 'private' [owned in part & controlled by Orange]... If it dies, it dies... end of story! Why should I pay for its inefficiency through my taxes and/or higher charges? Its actually FT that owns part of Telkom - Orange is an FT subsidiary and the brand for its mobile division.
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VituVingiSana		#105 Posted : Friday, September 10, 2010 10:49:10 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,350 Location: Nairobi		1) Obama is a Democrat... [I like the guy but I do not believe in 'tax & spend]. In any event, the actions of Obama + US govt will be judged by history... Does not affect Kenya as much! 2) As for the level playing field... well, Airtel came in years AFTER KenCell was born... Kencell -> Celtel -> Zain... So your argument falls flat! 3) Orange/France Telkom overpaid for Telkom Kenya! Their fault... 4) As for the other stuff [broken promises] FT were compensated... That I agree with... You can't sell what you do not own! So... brings me back to... Why should I care to support Telkom/Orange in the future using taxpayer cash??? [Old taxes/scams are Sunk Costs] Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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chris79		#106 Posted : Friday, September 10, 2010 10:51:11 AM
Rank: Member Joined: 7/31/2007 Posts: 341		@djinn can the same argument be applied to Safaricom's case? Protecting the interests of the investor and all?
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KulaRaha		#107 Posted : Friday, September 10, 2010 11:11:52 AM
Rank: Elder Joined: 7/26/2007 Posts: 6,514		And what abt protecting Zain? Maybe taxes should help subsidise their losses? Level playing ground? Business opportunities are like buses,there's always another one coming
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VituVingiSana		#108 Posted : Friday, September 10, 2010 11:15:07 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,350 Location: Nairobi		Do not forget YU & Flashcom either... They would love taxpayer subsidies too... Erm, there is a VVS Telecom as well... Please fell free to lobby subsidies for it too... Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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Djinn		#109 Posted : Friday, September 10, 2010 11:16:42 AM
Rank: Elder Joined: 11/13/2008 Posts: 1,565		@VVS You said "2) As for the level playing field... well, Airtel came in years AFTER KenCell was born... Kencell -> Celtel -> Zain... So your argument falls flat! " Not sure what mean here and what that has to do with my statement....or with Orange who were licenced in 2007 and started their race 7 years down the road...pls elucidate...maybe I am having a slow day... My point, GoK f***ed up in the late 90s...ideally whoever was to invest in Telkom should have been identified at THAT time. The cart before the horse....We should also NOT forget that the selection of Vodafone as an investor in SCOM was not a transparent process and not openly procured....that in itself set a BAD precedent and allowed it to grow into a monstrosity...sheltered by government since it had investments and CCK had barely cut its milk teeth and at one point the leadership as CCK was like having a wolf herd your sheep...all that has changed now... Having said that, we are such hypocrites... happy to reap huge profits from what started as a corrupt process (SCOM) and be indifferent to investors, FT, who are paying the price for the same corruption in the same era and entering the game 7 years too late...
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VituVingiSana		#110 Posted : Friday, September 10, 2010 11:23:33 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,350 Location: Nairobi		Since FT came in much later they knew the landscape coming in [I dont mean the sale of assets that were not there] just like Airtel did! Basically, FT can't expect special treatment coz the playing field was level for all in Voice by the time Airtel came in... Telkom/Orange had an advantage over Zain/Airtel in that they have both CDMA + GSM license! Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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