I like the comparisons here. Safaricom's success lies in the sustainable BoP focused strategy they rolled-out awhile back; so does Equity's success. Zain's strategy should therefore be a calculated shift from elitist to a BoP focus...not a simple anti-Safaricom or "Vuka" campaign. Wainaina On Mon, Aug 30, 2010 at 2:11 PM, Johnstone Ole Turana < jturana@ke.nationmedia.com> wrote:

Economics aside, the ongoing price wars mirrors the yesteryears customer battle between Equity Bank and the other banks. When Equity entered into conventional banking, it broke down all the entry barriers- ‘free account’, no charges for account maintenance (we all can recall the punitive minimum balance extortion), and banking the mwananchi. Big banks fought this and gave Equity one year or so-after all banking was high cost, high end game not for the villages with erratic income. Few years down the road the others have abandoned the exclusivity banking and embraced the Bottom of the Pyramid (BoP) customer.

At least now I know for sure I can call and have a decent chat, cross the t’s and dot the i’s which is good for my provider.

Cheers

Ole Turana

*From:* ke-internetusers-bounces@bdix.net [mailto: ke-internetusers-bounces@bdix.net] *On Behalf Of *Solomon Mburu Kamau *Sent:* Monday, August 30, 2010 1:58 PM *To:* Sam Gatere *Cc:* ke-users; KICTAnet ICT Policy Discussions *Subject:* Re: [kictanet] [ke-internetusers] Zain Kenya makes another move

I always find ot interesting to see people always giving pessimistic views on an investment. I'm not a shareholder of either Safaricom or Zain, but find this trend welcome. Zain(Airtel) will make losses in the first round, but then, let's wait and see what they want to offer to the Kenyan market, as long as the consumer is the winner. I don't think the consumer is worried about the losses Zain made, but he/she wants to communicate using the most affordable pricing in the market. The rest, to him, are just politics of the corporate world.

Me thinks

On 30 August 2010 13:37, Sam Gatere <sam.gatere@gmail.com> wrote:

Moaning about safaricom could be one of the strategies employed here... but we have to give a little grace to the dominant player where dealing with 15 million plus clients is no easy task! However it would also be important to look at the difference in mind set between Western Investors and those from the East. The former (West) have no problems making 10 bob profit per call while their counterparts seem not to mind making 50 cents! We also need to look at this whole price war from a birds eye view before narrowing down to Kenya. Airtel has 15 networks across the continent while Safaricom is only in Kenya. Should Airtel make Nairobi their Africa hub (of which I think it is) they will definitely up their game in by investing more to make their HQ a profitable one. Possibly We will see this war move on to the Data arena in not to long.

Sammy.

On Mon, Aug 30, 2010 at 12:50 PM, Andrea Bohnstedt < andrea.bohnstedt@ratio-magazine.com> wrote:

That's really the key issue, isn't it? They won't make money anytime soon - there's the low rates, but also the fact that they'll have to invest heavily in network and systems. Easy to moan about Safcom's customers service - but they manage 16m clients. I'm curious to see if Zain will grow their customer service at the same speed to accommodate all those new subscribers.

I also suspect that it'll be mostly very very price sensitive people who will change - again not the clientele that will earn the company much money.

In 2008, when Zain had the Vuka tariff (KES8 on and off net, if I remember correctly), the company made nearly USD90m losses. Last year, USD46m losses.

I found Mickael Ghossein's statement that 'the market is in a mess' quite telling. I suspect in this battle of the elephants, Orange and Yu are in most peril - which could easily contract the market again where subscribers have less choice.

Full disclosure: I'm a client with both big companies. There's only so much a girl can put into her handbag.

On 30 August 2010 12:31, Wainaina Mungai <wainaina@madeinkenya.org> wrote:

This is a very aggressive and most likely, a huge loss-making move in the short-run. I hope Zain has a well crafted (*sustainable*) longterm strategy.

If they are simply 'playing politics' against a 78% market leader (Safaricom), then they will eventually price their way out of the Kenyan market.

Kencell losses *>>>* Celtel losses *>>> *Zain losses *>>> *AirTel losses *>>> oblivion (or market leadership)*

My opinion is not influenced by my 'Safaricom shareholder/MPESA user' status ;-)

Wainaina

On Mon, Aug 30, 2010 at 11:43 AM, Alex Gakuru <gakuru@gmail.com> wrote:

BY MICHAEL KARANJA Updated 13 minutes ago

NAIROBI, Kenya, Aug 30 - Mobile telephony operator Zain Kenya has introduced Sh5 and Sh10 denomination airtime vouchers as it steps up its efforts to capture the mass market.

The introduction of the new vouchers is seen as a move to make the operator more accessible to the low-end market after a change in strategy following the entry of its new shareholders, Bharti Airtel.

Zain Kenya Managing Director Rene Meza said the move is aimed at complementing its recent 50 percent reduction of call charges.

“We are offering a wide range of scratch card denominations to suit the needs of all individuals. Access to telecommunication services is no longer a luxury but an integral part of each Kenyan’s socio-economic needs,” Mr Meza said.

....

Read more: http://www.capitalfm.co.ke/business/Kenyabusiness/Zain-Kenya-makes-another-m... Under Creative Commons License: Attribution Non-Commercial No Derivatives

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