True that @Ali on Market Failure.
We should not waste time trying to "fix" Safaricom. Safaricom behavior (right or wrong) is simply a manifestation of market failure. Fix the "Market Failure" and you fix Safaricom behavior :-)
It's a Regulatory exercise...and I did blog about it a while back @
http://www.nation.co.ke/oped/blogs/Is-Safaricom-beyond-Regulation/-/634/1938156/-/yfqotr/-/index.html.
walu.
--------------------------------------------
On Fri, 11/8/13, Ali Hussein <ali@hussein.me.ke> wrote:Date: Friday, November 8, 2013, 3:36 PM
Subject: Re: [kictanet] Safaricom shuts down cash for Bonga Points platform
-----Inline Attachment Follows-----
Kamotho,
Walu, Mwangi and all
Good points all. Lets address separate
issues:-
Market FailureAccording to Wikipedia this
means:-Market
failure is a concept within economic theory
describing when the allocation of goods and services by
a free
market is notefficient.
That is, there exists another conceivable outcome where a
market participant may be made better-off without making
someone else worse-off. (The outcome is not Pareto
optimal.) Market failures can be viewed as scenarios
where individuals' pursuit of pure self-interest leads
to results that are not efficient – that can be improved
upon from the societal point-of-view.[1][2] The
first known use of the term by economists was in 1958,[3] but
the concept has been traced back to the Victorian
philosopher Henry
Sidgwick.[4]
Are we saying that the
current situation in the Telco sector can be categorized as
such?
I'm not a lawyer but as
a business person I would humbly say
yes.
I will leave the legal
interpretation to my good friend John Omo at the CCK or
Matano who I presume is in charge of competition and tariffs
etc..
Loyalty Programs
In a sense loyalty programs are owned by the
company/consortium that created and manages it. So put
in this narrow way Safaricom has the right and should have
the right (remember that if something goes wrong on the new
platform we will blame Safaricom not the company that
created the trading platform) to protect its
Brand.
That of course is Business
1.0.
Business 2.0 and beyond calls for a more
agile business sense and environment. That is why we
expected Safaricom not to react in such a knee jerk way. But
then that is their prerogative.. However, a little bird
tells me we have not heard the end of this Bonga Points
Saga.
Lastly for all of us doubters who are
skeptical about Kenyan innovation I give you ONFON
MEDIA.
Ali
Hussein
+254 0770
906375 / 0713 601113
"Kujikwaa si kuanguka,
bali ni kwenda mbele" (To stumble is not to fall but a
sign of going forward) - Swahili Proverb
Sent from my iPad
On Nov 8, 2013, at 12:26 PM, Kamotho Njenga <kamothonjenga@gmail.com>
wrote:
Hussein,
I do agree that the Bonga point scheme is a creation
of Safaricom and they retain the right to regulate it. But
there is a whole difference between regulation and muzzling
of versatile innovations. As per the terms that Safaricom
has made public (I may not know the hidden terms, now that
they are hidden) Bonga points can be redeemed for rewards
ranging from Talk-time
(Minutes), Data, SMS, MMS bundles, Merchandise
from
Safaricom Retail Centres. They also state that you can
"share and receive Bonga Points and redeem fantastic
rewards." This simply means that I can share my bonga
points with anyone as I wish. The person with whom I share
my Bonga points may also choose to share some of his/her
money or any other resource with me such that the matter is
between willing parties. If Onfon Media realizes that we
need an efficient system to enable us execute our sharing
with utmost convenience, Safaricom has no business putting
its nose in the private affairs of men. In any case let
Safaricom or their next of kin state in specific terms any
infringement that has been rendered on their systems or
their so called terms and conditions.
The point here is that once I have incurred airtime
expenses to accrue Bonga points through my line they belong
to ME and not to Safaricom. Just in the same manner,
if you work for 30 days and salary becomes due, the employer
is obliged to settle your account without resorting to the
idle phrases of "terms and conditions". If
Safaricom still wants to hang onto MY Bonga points then they
are at liberty to withdraw their loyalty program at any time
convenient to them. Or why would some one offer you a gift
that you can not favorably enjoy? Its like being made to pay
a huge dowry a very beautiful bride for marriage only to be
told later that the terms and condition were that you are
not supposed to share a bed, even at night.
On Thu, Nov 7, 2013 at
9:56 PM, Ali Hussein <ali@hussein.me.ke>
wrote:
Kamotho
Can one argue that Bonga Points is a currently
created by Safaricom and hence they have a right to sort of
regulate its usage?
Ali Hussein
+254 0770
906375 / 0713 601113
"Kujikwaa si kuanguka, bali ni
kwenda mbele" (To stumble is not to fall but a sign of
going forward) - Swahili Proverb
Sent from my iPad
On Nov 7, 2013, at 7:43 PM, Kamotho Njenga <kamothonjenga@gmail.com>
wrote:
Thanks Hussein for bringing up
this matter.
It seems Safcom is so engrossed in protectionism to an
extent that the firm has little respect for individual
liberties, flexibility of choices or the law of the land.
Needless to say, once a firm has made an undertaking to
customers to award Bonga points when they spend their
airtime on its network, the firm becomes duty bound to
fulfill that obligation in its entire measure. As soon as
the Bonga points have accrued to a subscriber, they
immediately cease to be mere sales talk or a discretionary
bonus which the firm can choose to honor or not. They
immediately mutate into a perfect entitlement that is
legally recognizable. No reasonable firm would therefore
limit how a loyal subscriber chooses to activate such an
entitlement. The only acceptable limitations are those that
may naturally arise due to lack of technological capacity
that would widen the range of options through which
customers could gain full benefit of their hard earned bonga
points.
Instead of celebrating and embracing the landmark
application by Onfon Media and its associated flexibilities,
Safcom shut it down. By so doing Safcom lost an
opportunity to further the scope of options within their
loyalty program. Most significantly, the firm flouted the
trade law and its conventional tenets. According to Section
21 of the Competition Act (2010) "Agreements between
undertakings, decisions by undertakings or concerted
practices by undertakings which have as their object or
effect the prevention, distortion or lessening of
competition in trade in any goods or services in Kenya, or a
part of Kenya, are prohibited".
Section 24 of the Act reads as follows:
24. Abuse of dominant position
(1) Any conduct which amounts to the abuse of a dominant
position in a market in Kenya, or a substantial part of
Kenya, is prohibited.
(2) Without prejudice to the generality of subsection (1),
abuse of a dominant position includes―
(a) directly or indirectly imposing unfair purchase or
selling prices or other unfair trading conditions;
(b) limiting or restricting production, market outlets or
market access, investment, distribution, technical
development or technological progress through predatory or
other practices;
(c) applying dissimilar conditions to equivalent
transactions with other trading parties;
(d) making the conclusion of contracts subject to acceptance
by other parties of supplementary conditions which by their
nature or according to commercial usage have no connection
with the subject matter of the contracts; and
(e) abuse of an intellectual property right.
(3) Any person who contravenes the provisions of this
section commits an offense and shall be liable on conviction
to imprisonment for a term not exceeding five years or to a
fine not exceeding ten million shillings or to both.
This action of disabling the phone code that was being
used to trade in Bonga Points by Onfone media by Safcom
borders on intrusion into private transactions between
consenting parties. Unless Safcom can show evidence that the
inter-party dealings with Bonga points have exposed the firm
to any fraud or justifiable risk, they owe an apology to the
ICT fraternity and the entire world for attempting to stifle
innovation.
Kamotho
On Thu, Nov 7, 2013 at
9:58 AM, Ali Hussein <ali@hussein.me.ke>
wrote:
Safaricom has
disabled a phone code that was being used to trade in Bonga
Points by a Nairobi-based IT firm.
Onfon Media developed the code, *981*400#, that it
was using to buy the loyalty points from Safaricom
subscribers at Sh0.20 each and selling them for Sh0.35,
hence earning a return of 75 per cent.
Read
on http://www.businessdailyafrica.com/Corporate-News/-/539550/2055474/-/xk1n6az/-/index.html
There should be a healthy debate on
whether doing this is the right thing to do by Safaricom and
whether it is anti-innovation...
I for one wouldn't mind some cash event
for my thousands of bonga points...:)
Ali Hussein
+254 0770
906375 / 0713 601113
"Kujikwaa si kuanguka, bali ni
kwenda mbele" (To stumble is not to fall but a sign of
going forward) - Swahili Proverb
Sent from my iPad
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The Kenya ICT Action Network (KICTANet) is a
multi-stakeholder platform for people and institutions
interested and involved in ICT policy and regulation. The
network aims to act as a catalyst for reform in the ICT
sector in support of the national aim of ICT enabled growth
and development.
KICTANetiquette : Adhere to the same standards of acceptable
behaviors online that you follow in real life: respect
people's times and bandwidth, share knowledge, don't flame
or abuse or personalize, respect privacy, do not spam, do
not market your wares or qualifications.
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.