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Telcommunications - Outsourcing upside down
Elder
#21 Posted : Friday, January 28, 2011 11:36:18 AM
Rank: Elder


Joined: 9/7/2010
Posts: 2,148
Location: elderville
Abunuasi wrote:
@Elder In your world then one can't have all - innovation coupled with diversity and cheaper rates coupled with outsourcing? It is not an either or situation.

I wonder if your english teacher taught you the bmeaning of the word MAINLY:

My statement clearly reads:
This is mainly a battle between innovation coupled with diversity against cheaper rates coupled with outsourcing. Time will tell who emerges the winner.


Mainly? Thanks for inferring that the teacher who taught me English was negligent, never liked him so any negative point shall count. For your information he was not an Englishman so describing him as an 'english teacher' may be misleading.

Your sentence however, mainly or otherwise, presupposes that innovation and diversity is an exclusive preserve of Safaricom while yet Airtel has just entered the market and we are still to see the extent of their innovation and diversity or lack thereof.
He who can express in words the ardour of his love, has but little love to express. - Petrach, Son. (That men by various ways arrive at the same end. - Montaigne, The Essays of.)
QD
#22 Posted : Friday, January 28, 2011 12:27:32 PM
Rank: Member


Joined: 8/5/2009
Posts: 597
The strategy is very good if implimented well.

lets all remember the introduction of blackberry in the Kenyan market, it was by the then Celtel now Airtel who came with a good product but alucster implimentation Safcom picked the cue and ran with it.

To support the effeciency that Airtel is after they realy need a good infrastructure which is not yet at its best thus the need to build the boosters and increase the network coverage. This will realy need the money hence debt factor in the B/L Sheet.

Lets also hope that on the flimsy account of reduced revenue for the GOK they dont interfere with the trending.

En may be the giant will not slumber too long.
The problem with the world is that the intelligent people are full of doubts while the stupid ones are full of confidence
jasonhill
#23 Posted : Friday, January 28, 2011 4:28:10 PM
Rank: Member


Joined: 1/22/2011
Posts: 322
Location: Chicago, IL, USA
I'm not sure if any of the major telecom companies can ever fully recoup the cost of building the networks. It's more a game of hiding and restructuring debt. That's OK, because the people win- the infrastructure is built. But I think that telecom is largely like other "big infrastructure" projects. At the end of the day, no matter what they charge, they don't really make money. It's all about indirect earnings- a CEO gets paid this, a COO paid that, governments get their tariffs, contractors get some, vendors get some, resellers get some. But at the end of the day, the cost of building a reliable, fast network, especially when competing in the data market which has relatively low barriers to entry (face it, anyone with a a Wi-Fi access point, some slick caching software, and an internet connection can, in a way, compete). No, I think that telecoms are all about cash FLOW.

Thoughts?
muganda
#24 Posted : Wednesday, February 02, 2011 9:29:36 AM
Rank: Elder


Joined: 9/15/2006
Posts: 3,905
@jasonhill, interesting perspective. I agree CashFlow is king but I think why telecos make big money is because the billions in capital expenditure yield average return on capital employed of ~20%.

Meaning by the 6th year, whole spend is paid back.


On a closing note, it's very important to differentiate between efficiency and price(margins). In my opinion Efficiency as a strategy is commendable if it results in lower price. If however, Price as a strategy is the key pillar regardless of business margins, this would be foolhardy and shortlived.

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