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Why safaricom must reduce its costs and expenditures to remain a viable stock in future
Djinn
#111 Posted : Friday, September 10, 2010 11:30:41 AM
Rank: Elder

Joined: 11/13/2008
Posts: 1,565
@KulaRaha and VVS - Zain, Yu, Flashcom, Popote... I'm afraid my knowledge of how much shareholding the government has in these entities is rather limited...so I cannot with any degree of certainty say whether we should protect them...

I'm also a bit vague about how long they have been PRIVATE entities in the market but I could fathom a guess and say they are certainly more long in the tooth than FT/Orange in Kenya.

So, what do you think? Should we subsidise Zain, Flashcom and Yu given the stake GoK and taxpayers have in them?
Djinn
#112 Posted : Friday, September 10, 2010 11:38:09 AM
Rank: Elder

Joined: 11/13/2008
Posts: 1,565
chris79 wrote:
@djinn can the same argument be applied to Safaricom's case? Protecting the interests of the investor and all?


@Chris - no. In this particular case, I am only trying to argue for Telkom because it started out late as a privatised entity and unlike Vodafone who have reaped profits for 10 years, FT is yet to break even.
VituVingiSana
#113 Posted : Friday, September 10, 2010 11:41:25 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
I say... NO-ONE should be subsidized!

In Kenya, most firms that got subsidies were BLACK HOLES...

Look at KQ... It has been 'private' since the 90s... and (mostly) profitable unlike most of its counterparts in Africa including Air Zimbabwe, Air Tanzania, (old) Air Uganda... even South African Airways!

We have other black holes like KPC [Huge lawsuits], KPRL, etc!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
KulaRaha
#114 Posted : Friday, September 10, 2010 11:42:04 AM
Rank: Elder

Joined: 7/26/2007
Posts: 6,514
FT should not have come if they didn't want to compete.

Business opportunities are like buses,there's always another one coming
youcan'tstopusnow
#115 Posted : Friday, September 10, 2010 11:51:51 AM
Rank: Chief

Joined: 3/24/2010
Posts: 6,779
Location: Black Africa
I say the field IS level already
GOD BLESS YOUR LIFE
KulaRaha
#116 Posted : Friday, September 10, 2010 11:56:22 AM
Rank: Elder

Joined: 7/26/2007
Posts: 6,514
This arguement of protecting Telkom still doesn't make sense. No one supporting it has given one sensible reason why we should defend Telkom.

Amazing...its like Safcon diehards who are upset we are calling at 3/=.

Illogical.
Business opportunities are like buses,there's always another one coming
VituVingiSana
#117 Posted : Friday, September 10, 2010 12:04:06 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
You know the advert about French guns:

"WW2 French guns for sale. Dropped once, never fired."

"I would rather have a German division in front of me than a French one behind me." —General George S. Patton

An old saying: Raise your right hand if you like the French.... Raise both hands if you are French.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Rahatupu
#118 Posted : Friday, September 10, 2010 1:34:30 PM
Rank: Veteran

Joined: 12/4/2009
Posts: 1,982
Location: matano manne
@Abunuasi, 4G and video idea very good, but think about the numbers, could they get the needed critical mass to sustain video calls as a competitive advantage?
2. Safcom's diversification into computer and handset sales, can they expand fast enough and into the mass market (outside Nairobi)?
Only when the answers to these questions are in the affirmative, then Safcom can sustain its edge against a brutal bully that Airtel seems to be.

@Kularaha, Jua mingi: I bet Dr. Ndemo was right in looking at the aspect of unhealthy competition. All the job losses as highlighted in reduced sales (Who uses 500 and 1k scratch cards anymore?). Airtel will repatriate its profits/and losses too. The subscribers maybe the happy lot now. Lets enjoy it.

While at it Zain seemed the saviour to most pple when they were the 1st to lower to 3 bob. It seems to work since some pple are ignoring the fact that Safcom is still cheaper than Zain (2bob). Though it seems to have eased out since there is not as much activity from Zain calls as was initially. Therefore Safcom should lower charges of M-pesa, data before Zain spoils the party.

For investors, lets wait for Safcom at below 3.50 to enter on long term basis.
Mpenzi
#119 Posted : Friday, September 10, 2010 3:59:27 PM
Rank: Veteran

Joined: 10/17/2008
Posts: 1,234
@Djinn

Perception is crucial in matters of govt subsidies. Uchumi was subsidized and kept alive by the government mostly becoz of public sentiment that it was 'ours' and shouldnt be let to die. We could as well as let it die and have Nakumatt, Tuskys etc rule the roost. I dont think Telkom Kenya inspires the same kind of public sentiment and it would be much harder to convince govt to sink in more money into the entity, particularly because Telkom appears so rudderless and with no game plan.
VituVingiSana
#120 Posted : Friday, September 10, 2010 5:25:47 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
@mpenzi - I have ZERO upenzi for Telkom! At least Uchumi was an entity that tried to serve Kenyans!

In the 90s, Uchumi was king under an able CEO... then came kirubi's henchman & bye-bye Uchumi! I have no fond memories of Telkom!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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