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Safaricom should sue CCK..period.
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mukiha
#21 Posted : Tuesday, May 04, 2010 10:13:31 AM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
Two fundamental points are being missed:
1] Telecommunications are not a basic human right! They are neither a matter of life and death. Thus consumers of the service do not need price protection. They can vote with their feet by simply choosing to stay without the service!

2] Safaricom was the THIRD telephone company to enter the Kenyan market [after Telkom and Kencell]. They fought a very serious battle for marketshare and in three years time the took position 1. After that they did not relax and celebrate - no, they continued fighting and now are the undisputed market leader with about double what all the other players have [combined!!].

SCOM did not get to that position as a result of government protection [as is the case with KenGen, for example]. They faught an open battle and won. The losers, especially Telkom and Zain, cannot now wake up and start crying. If they think the battle is too tough, they should just close shop and go home. Isn't that what Castle, Spreme, Barnnets, Stutterfords etc did?
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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mukiha
#22 Posted : Tuesday, May 04, 2010 10:17:15 AM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
Chaka wrote:
May be supernormal profits means 'more than the combined profits' of the other operators ?

Well; what would you expect of a player who has over 70% market-share?

Are we going to punish SCOM for the mistakes [read, losses] made by Zain, Orange and Yu?

This reminds me of the fundamental error of giving scholarships to "children from poor families", but I digress. We can discuss that at another time....
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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mukiha
#23 Posted : Tuesday, May 04, 2010 10:29:37 AM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
mukiha wrote:
Two fundamental points are being missed:
1] Telecommunications are not a basic human right! They are neither a matter of life and death. Thus consumers of the service do not need price protection. They can vote with their feet by simply choosing to stay without the service!

2] Safaricom was the THIRD telephone company to enter the Kenyan market [after Telkom and Kencell]. They fought a very serious battle for marketshare and in three years time the took position 1. After that they did not relax and celebrate - no, they continued fighting and now are the undisputed market leader with about double what all the other players have [combined!!].

SCOM did not get to that position as a result of government protection [as is the case with KenGen, for example]. They faught an open battle and won. The losers, especially Telkom and Zain, cannot now wake up and start crying. If they think the battle is too tough, they should just close shop and go home. Isn't that what Castle, Spreme, Barnnets, Stutterfords etc did?


Oh; and by the way, ever since inception, SCOM has always been more expensive than the competition but they have managed to convince the consumer that they are cheaper... or, may be, the market is not as price sensitive as is assumed. So you cannot accuse them of undercutting.
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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2012
#24 Posted : Tuesday, May 04, 2010 11:07:51 AM
Rank: Elder

Joined: 12/9/2009
Posts: 6,592
Location: Nairobi
My worry is more on what precedence this action is setting. Who will be next? Scangroup? May be Kenol Kobil? Nation? Citizen? Tuskys? Equity? Bamburi? Bidco? KQ? All companies will be afraid of growth and market leadership if it's termed unfair to be ahead of your lax and inefficient competitors.


BBI will solve it :)
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AmHere
#25 Posted : Tuesday, May 04, 2010 11:39:55 AM
Rank: Member

Joined: 7/7/2009
Posts: 93
I do not think you should have a free market that does not monitor and curb anti-competitive practices. What is anti-competitive is probably what needs to be clear. Problem is it can be difficult to pin down into law what exactly anti-competitive practices are especially for a fast changing industry like telecoms. Shouldn't there be some (not absolute) leeway for the regulator?
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mukiha
#26 Posted : Tuesday, May 04, 2010 1:59:35 PM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
This whole saga smells fishy. There is a Monopolies and Prices Commission of Kenya which is a Department of the Ministry of Finance.
Its mandate is to enforce Competition Principles and Rules in accordance with the provisions of the Restrictive Trade Practices, Monopolies and Price Control Act.

Why does CCK want to duplicate a function that is ably handled by another department?
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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muganda
#27 Posted : Tuesday, May 04, 2010 2:35:52 PM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
mukiha wrote:
It appears that none of the contributors to this thread so far have read "THE KENYA INFORMATION AND COMMUNICATIONS (FAIR COMPETITION AND EQUALITY OF TREATMENT) REGULATIONS, 2010"

You can download the regulations HERE:


@mukiha thanks for this; I searched and searched and finally found it here

Now on reading the document it seems to establish a framework much like would be found in developed countries. So if the application is to Safaricom's disadavantage @mlefu is right and they'd contest in court.

But excess profits ('supernormal profits'), tying or product bundling, and predatory pricing ('subsidizing of existing lines'); though not final evidence by themselves, are often found where monopolies exist.
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KulaRaha
#28 Posted : Tuesday, May 04, 2010 2:47:53 PM
Rank: Elder

Joined: 7/26/2007
Posts: 6,514
Sue, not sue, its all irrelevant when you have customers willing to pay more for dropped calls and congestion than other networks.

Safcon loyalty is illogical, so they shouldnt worry.
Business opportunities are like buses,there's always another one coming
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mv_ufanisi
#29 Posted : Tuesday, May 04, 2010 4:40:15 PM
Rank: Member

Joined: 1/15/2010
Posts: 625
Damn this is what capitalism is about. Once you're invested in a share, you can go to great lengths to protect it. As long as ur company is making super normal profits you are happy regardless.
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mkenyan
#30 Posted : Tuesday, May 04, 2010 6:17:42 PM
Rank: Veteran

Joined: 4/1/2009
Posts: 1,885
2012 wrote:
My worry is more on what precedence this action is setting. Who will be next? Scangroup? May be Kenol Kobil? Nation? Citizen? Tuskys? Equity? Bamburi? Bidco? KQ? All companies will be afraid of growth and market leadership if it's termed unfair to be ahead of your lax and inefficient competitors.



why would you worry about that? there should be competition law in all sector and i hope that this is but the first step in the right direction. and yes, the likes of kenol (did someone say a cartel?) nation, eabl (the absence of summit in most pubs and the stories about why) nakumatt etc have some practices which need to be tamed by an apt competition law. growth is not bad and should be encouraged but abusing such growth to the detriment of fair competition should not be.

it might look unfair for safaricom but once you are dominant in the market (regardless of how you get there - whether by hard work or otherwise) you should not be allowed to take advantage of that dominant position by engaging in restrictive practices.

the question should not be whether there should be such regulations but the substance of the regulations. that really is what we should be focusing on. not whether a dominant player in an industry should play fair.

off the cuff an obvious example of an anti-competitive practice is keeping ones cross tariff cost high knowing that your subscribers can't move as result and thus making it hard for people to subscribe to the competition.
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