MM, Andrea et al, These are quite deep insights...my focus has mainly been on Consumer Internet Prices which would most likely fall under "what is to be regulated" as a result of being one of the critical services in the hands of a "dominant player". The pressure to regulate this service is particularly high given the investments the Government made in the TEAMS project (undersea cable) on behalf of the public (tax-payers) who are really yet to see meangful CONSUMER internet price reductions... Whereas as a consumer, I would be happy to see price reductions in Internet consumer prices, am not quite sure that a regulatory approach to this would be sustainable. At the moment I pay for about 13USD (1,000Ksh) for 400MB of mobile internet. Lets say the regulator using their informed formulae comes up one morning and forces the dominant player to make this tariff read something like 6USD for the 400MB - what would be the likely visa-viz the expected outcomes of such a move in the market? a) Would this necessary lead to an increase in number of citizens using the internet service or would it simply mean the current privilaged number of users enjoy better prices with little impact on new internet users? b)How would this then impact on the (dominant) Operator, Regulator, Competitors, Investors and other stakeholders? walu. --- On Fri, 5/7/10, muriuki mureithi <mureithi@summitstrategies.co.ke> wrote: From: muriuki mureithi <mureithi@summitstrategies.co.ke> Subject: Re: [kictanet] Call for opinions - CCK vs Safaricom To: jwalu@yahoo.com Cc: "'KICTAnet ICT Policy Discussions'" <kictanet@lists.kictanet.or.ke> Date: Friday, May 7, 2010, 9:07 PM Just checking my old notes for context on how we came to where we are - and how we can get out!! Kencell was awarded a licence to operate on 23/1/2000 while Safaricom under Vodafone management took over on 20/7/2000. Both operators launched their operations on 24/8/2000 ( Kencell) and 21/10/2000 ( Safaricom) and by dec 2000 , Kencell had 39300 customers while Safaricom was far behind at 29100 customers . Safaricom was the smallest player in the market! Indeed the situation did not change immediately and by march 2001 kencell was still leading at 126000 against Safaricom’s 93700. At the time, Telkom had seemingly unassailable lead of 300000 controlling 60% market share with Safaricom trailing the pack. By June however, things starting changing with the last overtaking both by the end of year and positions reversed - it seems forever. Note that at the time , TKL could not change its tariffs without authority from CCK as the incumbent dominant player not to ‘kill’ the nascent players. The cellular operators needed only to file their tariffs with CCK While Safaricom took off behind Kencell by 3 months it had 17000 customers on its list inherited from TKL, it also had some goodies by virtue of its closeness to TKL – interconnection, access to tkl property to build cellsites etc. these however cannot account for its growth today. It is a question of strategies both companies took –one focused on the high value niche market emphasising post-paid requiring PIN certificates those days , the other focused on the mass market with tools like per second billing, no charge on customer number etc. branding , level of investment and consistent brand . these were a major differentiator and all have contributed to make the difference we see today. While we are very price conscious , there are many other elements built around of the network we chose and affect the decision of choice . last year for example the networks invested 41% of their revenues for network expansion. This is a massive investment and certainly biggest investor must expert to get the most out of its investment. the new operators tried to fight on price alone but certainly that did not dent the market shares and in a market where 99% of the market is pre paid and can vote with their legs and churn with least effort with or without MNP. So, are regulatory tools based on tariffs adequate to reign-in market dominance as proposed in the regulations? NO. it cannot account for the investment, strategies , innovation and risk taken by the dominant player. Equally , it does not jerk up the smallest players either. Strategies define who dominates or lose . The incumbent cellular operators in Tanzania and Ghana collapsed when new operators came to the market , MTN Uganda on its launch registered more customers on day one than the incumbent Celtel. We need tools that really jerk up those behind to really exploit the national resource ( spectrum etc ) they are holding It’s true that dominant players can easily use their might to squeeze smaller ones out of the market with disastrous long term consequences to the consumer and the market . Tariffs is not the only tool available to an operator. We should not forget the wide range of services operators launch to increase stickiness to its services . The government and by extension CCK has a duty to protect the consumers and having chosen competition as a foundation to customer protection and choice in the National ICT Policy , it must safeguard the competition process. A starting point is clear boundary that defines when competition fuses into abuse and at a higher level when market failure affects competition. Cheers MM From: kictanet-bounces+mureithi=summitstrategies.co.ke@lists.kictanet.or.ke [mailto:kictanet-bounces+mureithi=summitstrategies.co.ke@lists.kictanet.or.ke] On Behalf Of Andrea Bohnstedt Sent: 07 May 2010 18:28 To: mureithi@summitstrategies.co.ke Cc: KICTAnet ICT Policy Discussions Subject: Re: [kictanet] {Disarmed} RE: {Disarmed} Re: Call for opinions - CCK vs Safaricom I think there are several interesting points here: Yes, a regulator should keep an eye on monopolistic and oligopolistic developments. But, as Michael Joseph said, dominance should only be penalised if abused, and in order to do so, this abuse needs to be defined in the regulations - which has not been done, he says, despite repeat reassurances given to him by both the Ministry of Information and the CCK (see http://www.ratio-magazine.com/201005052971/Kenya/Kenya-Safaricom-Willing-to-...) Celtel/Zain clearly didn't start out to be a 'feeble player', nor were they a late entrant, as the figures I cited show. So is it fair to penalise Safaricom for Celtel's inability to retain market share and capitalise on having been in the market for more than a decade? Orange: France Telecom bid around USD100m more for Telkom Kenya than their nearest competitor in the privatisation. Was that price justified? Nobody else seems to think so, not even France Telecom anymore, since they are now reportedly trying to get some or all of that money back. Yu: Econet couldn't get going for ages because their local partner could raise their financial contribution. Was that a sensibly chosen local partner? Obviously it's not ideal for the market and customers to have such limited competition, but then a) the regulation lacks a crucial element, and b) the competition seem to have been quite adept at shooting themselves in the foot. Is it fair to punish Safaricom for that? Andrea On 7 May 2010 18:04, Pius Walela <PWalela@strathmore.edu> wrote: Recent developments in the mobile telephony sector are of concern . I opine that for a true capitalist society to manifest the market should be subject to forces of demand and supply to create conducive conditions for the market to thrive and in extension to ensure its longevity. However Oligopolistic and monopolistic tendencies in the market ought to be constrained to cushion feeble players and potential new entrants from eventual or outright failure, as such regulation is essential however these regulations have to be moderated. From: kictanet-bounces+pwalela=strathmore.edu@lists.kictanet.or.ke [mailto:kictanet-bounces+pwalela=strathmore.edu@lists.kictanet.or.ke] On Behalf Of Andrea Bohnstedt Sent: Friday, May 07, 2010 5:57 PM To: Pius Walela Cc: KICTAnet ICT Policy Discussions Subject: {Disarmed} Re: [kictanet] Call for opinions - CCK vs Safaricom Amusing little factoid: In 2004, when Celtel acquired Kencell: 'Kencell, with about 1.2 million subscribers, has recently lost market share to rival Safaricom, a joint venture of Kenya's state-owned Telkom Kenya and Britain's Vodafone. Safaricom's subscribers have grown to 1.8 million, increasing its share to 60% from about 50%. So Celtel/Zain managed to work their way down from 50% to 14% or so over the past six years. Must have been quite a slippery playing field. (http://www.regulateonline.org/2003/intelecon/2004/May/A-Kenya-040525.htm) On 7 May 2010 17:38, Walubengo J <jwalu@yahoo.com> wrote: MM, this Kwame guy is an interesting read!. One amusing message I picked says that the regulator should be protecting consumers - not competitors ;-) ..and from the "streets" some analyst said that Safcom may have exploited its dominance position; but that was in the beginning (ref: interconnection tariff wars with Kencell 6-8yrs ago). Currently, it will be a tall order to get evidence of the yet to be defined "exploiting" dominance postion" walu. --- On Fri, 5/7/10, muriuki mureithi <mureithi@summitstrategies.co.ke> wrote: From: muriuki mureithi <mureithi@summitstrategies.co.ke> Subject: Re: [kictanet] [ke-internetusers] {HIJACK} Call for opinions - CCK vs Safaricom To: jwalu@yahoo.com Cc: "'KICTAnet ICT Policy Discussions'" <kictanet@lists.kictanet.or.ke>, "'ke-users'" <ke-internetusers@bdix.net> Date: Friday, May 7, 2010, 3:32 PM Kui For a local context from an economic perspective , read the attached Regards Muriuki Mureithi From: kictanet-bounces+mureithi=summitstrategies.co.ke@lists.kictanet.or.ke [mailto:kictanet-bounces+mureithi=summitstrategies.co.ke@lists.kictanet.or.ke] On Behalf Of John Kariuki Sent: 07 May 2010 08:09 To: mureithi@summitstrategies.co.ke Cc: KICTAnet ICT Policy Discussions; ke-users Subject: Re: [kictanet] [ke-internetusers] {HIJACK} Call for opinions - CCK vs Safaricom Kui, For some background information on Competition, Dominance,etc you could check on the following information resources which should be available on-line: 1.Oftel, January 2000- The application of the Competition Act in Telecommunications Sector. 2. INTUG - Anti-Competitive Conduct and Competition Policy in Telecommunications,ITU,Geneva 22 Nov.2002 3.EU Directive 2002/19/EC 0f 7/3/2002 (Access Directive) 4. European Court of Justice in " United Brands v. Commission(1978) ECR. 207 5.Telecommunication Regulation Handbook(Module 5 - Competition Policy) by INFODEV, Good Luck, John Kariuki --- On Thu, 6/5/10, Marie-Anne Kinyanjui <mkinyanjui@nation.co.ke> wrote: From: Marie-Anne Kinyanjui <mkinyanjui@nation.co.ke> Subject: [ke-internetusers] {HIJACK} Call for opinions - CCK vs Safaricom To: "McTim" <dogwallah@gmail.com> Cc: "KICTAnet ICT Policy Discussions" <kictanet@lists.kictanet.or.ke>, "ke-users" <ke-internetusers@bdix.net> Date: Thursday, 6 May, 2010, 8:47 Is there anyone on the list with a firm grasp of the industry (and who is not directly involved :-) who is wiling to offer their objective views on this subject for publication in Business Daily? 400-600 words please. Thanks. Kui Kinyanjui Business Daily -----Original Message----- From: kictanet-bounces+mkinyanjui=nation.co.ke@lists.kictanet.or.ke [mailto:kictanet-bounces+mkinyanjui=nation.co.ke@lists.kictanet.or.ke] On Behalf Of McTim Sent: Thursday, May 06, 2010 8:15 AM To: Marie-Anne Kinyanjui Cc: KICTAnet ICT Policy Discussions; ke-users; Angela Nganga- Mumo Subject: Re: [kictanet] [ke-internetusers] Re: {Disarmed} Re: CCK vs Safaricom?- and now Safcom vs the Rest? On Thu, May 6, 2010 at 7:35 AM, Solomon Mburu Kamau <solo.mburu@gmail.com> wrote:
This is great Angela. I really need to know why the 'big boy' is suddenly crying foul.
Let's re-examine our assumptions of who the "Big Boy" in the Kenyan Telecommunications market is. The GoK owns a huge minority shareholding in Telkom.Orange (and may in future own a majority share). When Orange makes a profit, so do its owners. The GoK owns a huge minority shareholding in Safaricom. When SafCom makes a profit, so do its owners. The GoK collects a tremendous amount of VAT and other taxes from the telecoms market players. The GoK collects a tremendous amount of license fees and frequencies fees from the telecoms market players. The GoK sets policy via the CCK and the Ministry. So from my POV, the GoK is the BIG BOY, it seems to me that this is the "elephant in the room" that no one is talking about. In any case on this specific regulation, I applaud the intent of creating a level playing field. However, I see no monetary "teeth" or enforcement measures (read fines) in this single doc (I have yet to read the others). My main objection is the 25% rule. My reading of this is that there MUST always be at least one dominant provider. Let me use a poker game analogy to make my point. Before the first hand is dealt, all players will have an equal amount of chips. After the first hand (and subsequent hands) there will (most likely) be a "chip leader" and a "short stack". It is not likely that there will ever be equilibrium in the game (or in the telecoms market). I would suggest that this clause is not helpful, at least at the 25% value at which the trigger is now set. No wonder Safaricom is complaining. -- Cheers, McTim "A name indicates what we seek. An address indicates where it is. A route indicates how we get there." Jon Postel
On 06/05/2010, Carole K <mhariricarole@gmail.com> wrote:
Thank you Angela, you are a star! The rest of us can now be informed about this new "unfair" regulation.
CK
On Wed, May 5, 2010 at 7:51 PM, Angela Nganga- Mumo < anganga@orange-tkl.co.ke> wrote:
Dear All,
Please find a PDF copy of the regulations.
Regards,
logo2
Angela Ng'ang'a - Mumo
Head of Corporate Communications
Landline: + 254 20 3232011
Orange Fixed Plus : +254 20 2454233
Orange Mobile: +254 772 548 066
Email : anganga@orange-tkl.co.ke
cid:image003.jpg@01C9FEEE.6AAFAFA0
-----Original Message----- From: ke-internetusers-bounces@bdix.net [mailto:ke-internetusers-bounces@bdix.net] On Behalf Of bitange@jambo.co.ke Sent: Wednesday, May 05, 2010 7:41 PM To: Andrea Bohnstedt Cc: KICTAnet ICT Policy Discussions; ke-users Subject: [ke-internetusers] Re: {Disarmed} Re: [kictanet] CCK vs Safaricom?- and now Safcom vs the Rest?
Will send it tomorrow.
Ndemo.
I'd like to see the text, too. Dr Ndemo, could you or one of your colleagues email round a pdf with the regulations, please? Easier and a bit nicer on the environment than all of us running downtown to buy paper copies.
Thanks, Andrea
On 4 May 2010 09:32, Walubengo J <jwalu@yahoo.com> wrote:
the drama continues,
in a louder paid-up advert in today's press Yu, Orange and Zain support the CCK regulations and dispute yesterday's Safcom's complaint. All these without the public (or is it me?) not having copies of what they are arguing about!
Someone told me the copies of this regulations are available at the Government Printers at a small fee. Halloo? Assuming I leave in Lokichoggio, Should i spend two days on the road to come and pickup some hard-copy regulations that should be downloadable?
Sergon, can you help me, where does this leave you with your eGovernment stories?
walu.
--- On *Mon, 5/3/10, Walubengo J <jwalu@yahoo.com>* wrote:
From: Walubengo J <jwalu@yahoo.com> Subject: Re: [kictanet] CCK vs Safaricom? To: jwalu@yahoo.com Cc: "KICTAnet ICT Policy Discussions" <kictanet@lists.kictanet.or.ke> Date: Monday, May 3, 2010, 10:55 AM
Just seen a loud complaint from Safcom in today's Daily Nation. They quoted four regulations that have been gazetted and I have searched www.cck.go.ke to get a mouse on them but failed.
Anybody with e-copies on these regulations or specific url can plse update.
walu.
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