@Ouma,

there's always a catch with this internet pricing thing.  Remember, Operators have fixed overheads (e.g. Pre-purchased International bandwidth over the submarine cables, committed over periods of  10-15yrs + Annual Operational Costs). This means, Operators have already sunk in money and must recoup+ a fair profit.

The interesting question has always been :- what is the best method of recovering the investment (ROI) without exploiting the users?

Option 1:- the bottom of the pyramid approach.
Reduce Internet Price to bare minimum - thus widening the customer base - and subsequently meeting your overheads + profit.

Option 2:- the top of the pyramid approach
Charge highly to a select(few) group of (affluent?) consumers. You still meet your expenses + profit (possibly in a  lesser complex/costly way e.g. no need of hiring a large group of customer service)

What are the risks for both these options (from an Operator point of view)?
Option 1:
Dropping internet prices, may not necessarily expand your customer base. The commodity here is internet not Ugali (bread). How many Kenyans have a sustainable reason to get online beyond the FaceBook generation? Put differently, why would a Kenyan in rural Kenya (70% of us still live there) want even an email address? Instead what would happen, is that your already existing small internet users will harvest the benefit without increasing the Operators Revenues (hence the rush to  fix such guys with a bandwidth cup to 128K?)

Option 2:
Charging high prices to quickly recoup your investment works only in a monopolistic environment.  So not an option in the Kenyan market. The Airtel, Orange et. al.are waiting for such blunders in order to eat Safcom's  breakfast, lunch and dinner.

Optimum Solution?
I do not know. But am sure it can be found.

walu.


--- On Tue, 7/26/11, Michael Ouma <benomnta@yahoo.com> wrote:

From: Michael Ouma <benomnta@yahoo.com>
Subject: Re: [kictanet] Lower tariffs lower speed
To: jwalu@yahoo.com
Cc: "Kictanet" <kictanet@lists.kictanet.or.ke>
Date: Tuesday, July 26, 2011, 3:01 PM

Here's the response from Safarim via Twitter on this issue:

SafaricomLtd Safaricom Limited
@
@MichaelOuma Hi, for the unlimited offer the speeds are upto 128kbps, other bundle speeds are on 3G as before, follow bit.ly/g6PDbx MG
 
Michael Ouma
Journalist
Kenya
Tel:+254-725-537823



"Do not go where the path may lead, but go instead where there is no path and leave a trail," - Ralph Waldo Emerson
From: Grace Githaiga <ggithaiga@hotmail.com>
To: benomnta@yahoo.com
Cc: kictanet@lists.kictanet.or.ke
Sent: Tuesday, July 26, 2011 2:15 PM
Subject: Re: [kictanet] Lower tariffs lower speed

Robert
I noticed the reduction immediately the tarrifs went down. Maybe thats the catch. We get a reduction in tarrifs and also on speed! A response from safcom would be in order. 
 
Rgds
Grace

 
-----------------------------------------------------------------------------------
If you have the strength to survive, you have the power to succeed. Life is all about choices we make depending upon the situation we are in. Go forth and rule the World!

 
Date: Tue, 26 Jul 2011 09:04:16 +0100
From: robertyawe@yahoo.co.uk
Subject: Re: [kictanet] Lower tariffs lower speed
CC: kictanet@lists.kictanet.or.ke
To: ggithaiga@hotmail.com

Hi,

I am experiencing slow access between local site which would rule out the Seacom issue.

Regards
 
Robert Yawe
KAY System Technologies Ltd
Phoenix House, 6th Floor
P O Box 55806 Nairobi, 00200
Kenya

Tel: +254722511225, +254202010696


 privacy, do not spam, do not market your wares or qualifications.

_______________________________________________
kictanet mailing list
kictanet@lists.kictanet.or.ke
http://lists.kictanet.or.ke/mailman/listinfo/kictanet

Unsubscribe or change your options at http://lists.kictanet.or.ke/mailman/options/kictanet/benomnta%40yahoo.com

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.


-----Inline Attachment Follows-----

_______________________________________________
kictanet mailing list
kictanet@lists.kictanet.or.ke
http://lists.kictanet.or.ke/mailman/listinfo/kictanet

Unsubscribe or change your options at http://lists.kictanet.or.ke/mailman/options/kictanet/jwalu%40yahoo.com

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.