Hi Edith

Thanks for the data  which  could give some empirical data on which to make informed decisions  on the cost of mobile services

In doing so we need to interrogate the tool used for the comparison and see how far it is valid in our situation  and therefore the validity of the comparison

The tool by OECD developed in 2006  assumes  common or nearly common features of the operators i.e.

- a case in point is coverage . In Kenya , this is not the case, Safaricom has the largest coverage and therefore a   price comparison must take this into account  which the tool cannot . given that low end users as intended by the tool wish to travel across the country  ,   an improved tool would capture signal  per km coverage  -  Safaricom would come out cheapest . That tool used by the policy makers would encourage  even more investment  to expand coverage

- Services wrapped around a  number – the OECD tool assumes voice  and limited data  services – Kenya is in the global map because of the services it has put around the cellular number  . thus different operators have put different services and which gives a low end user an advantage . again some of the operators have different spread of MMT coverage and services around it and one got global recognition and award ( Safaricom was awarded this week in Barcelona),  support for low end  user  e.g. Okoa jahazi,  data offering e.g. 3G , support for the number – access to customer care ,  and psychological image – branding around it

 This is why many Kenyans have more than one sim card.  While one card may give a cost advantage on voice in and around urban areas, the same SIM card does not give  MMT or data and hence  the need to have another card or even another phone. The cost is eventually is high for the low end user

We can put Kenya in the map again by developing our own tool that helps Kenya towards vision 2030. OECD tool is not appropriate for a developing country  like Kenya . it fails to capture  why Kenya is on the world map and where  we have failed , why we failed

cheers

Muriuki Mureithi

Those who bring sunshine to the lives of others cannot keep it from themselves. Sir james m barrie

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 Edith Adera
Sent: 18 February 2011 07:39
To: mureithi@summitstrategies.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: [kictanet] FW: Price Control in the Telecom Market in Kenya?

Some statistics!

EBITDA is Earning before interest tax depreciation and amortization and is an accounting measure that allows comparison across companies since it neutralizes tax and cost of capital effects as well as depreciation rules.