On Wed, Jan 19, 2011 at 11:06 PM, Barrack Otieno <otieno.barrack@gmail.com> wrote:

Well Listers i suggest we move away from a personalised (political :-)) debate targeted at the PS and tackle the issues that have been raised in the article soberly, i have picked some excerpts from the article posted by Shem. Could we also comment on the comments attributed to Michael Ghossein (TKL) and Mr. Peter Wanyonyi?

Regards

“We have asked CCK (industry regulator Communications Commission of Kenya) to evaluate if this kind of pricing is sustainable,” Dr Ndemo said on Monday.
“I am not opposed to reduced prices but they have to make business sense,” he said. “Competition has to take care of re-investment in the sector as well as shareholder value.”

My simplistic view:

"re-investment" and "shareholder value". I don't see how those relate to Airtel. If Airtel's shareholders are fine with the move, then why are we bothered? Who are we worrying about here? Safaricom, Yu and Orange??

Orange Kenya CEO Mickael Ghossein said on Monday that the future of the industry’s profitability appears grim should the current price wars be allowed to prevail.

The matter raising this debate is about "on-net" calling rates for Airtel. How does that affect their competitors??

“There has not been largely significant increase in the traffic across networks that would indicate that the low pricing model offered by the competition has resulted in massive recruitments.

Why does Mr. Ghossein expect "traffic across networks" when actually, Airtel's mission is to promote more calls "on-net"?

In any case, cannibalisation of another player’s market share cannot be considered as industry growth,” Mr Ghossein said.

Competition is being called cannibalisation??

“Operators will see little justification in improving call and related quality when profits are falling under assault from Airtel’s strategy.

“Improving service quality requires investment in new infrastructure, but with ever-reducing revenues, this will not happen,” warns Mr Peter Wanyonyi, a telecoms analyst.

It will happen, if operators started sharing infrastructure. Soon, they will be sharing it anyway, thanks to the govt's plan to "own" the infrastructure to be used for LTE.

But India’s Bharti Airtel-owned Kenyan subsidiary has defended its decision.

I too have defended Airtel, in my own simplistic way, as a consumer.

What everyone is seeing is a situation where the PS's comments are being seen in two dimensions: Attempts to favor some players in the field, and an attempt to manipulate the regulator.