The other day, I was having a lively exchange on why Safaricom is the worst thing that happened to Kenyans. “What? With 8 bob calls? How do you go calling them such ugly names?, ” you might wonder.
Well it wasn’t very clear to me either, but with 6+ million subscribers, Safaricom has such a powerful resource, you wouldn’t believe. And so much money, any competitors (media-speak for Celtel) can easily be priced out. Last year, they made 1 billion shillings in every month. That’s Kshs. 250 million in one week! And that is pure, clean profit! If any other company made this much in one year, they’d be considered to be doing pretty well…
Let’s talk about Celtel for a bit. Having launched their new Uhuru tariffs with a lots of flair to match, I expected a big switch from price conscious Kenyans. (I’ll tell you something about this later). It did happen, for a few days. I even got 2 Celtel lines for myself to take advantage of both the tariffs. Safaricom hit back with its 10 bob all-the-time calls and later, with the limited offer Saasa tariff, where for 12 hours a day, one can make calls @ 8 bob a minute, Safcom to Safcom of course. And as much as 52 bob per minute to call Celtel! (BTW what sort of name is Saasa? Don’t try to stretch the middle “aa” coz you’ll end up soundin real weird… or was that the idea?)
Anyway, what Safaricom had done was to effectively lock in their customers, all 6+ million of them. And charging Celtel an arm and a foot to allow calls to this pool. So during the discussion an interesting idea was floated. What if it cost you 7 or even 6 bob to call within the Celtel network? Won’t every other Kenyan have 073X sim cards in place most of the time? Besides, it hardly costs them anything to have calls routed thru’ their own network.
Sounds like a good idea, until you remember that it the reverse also applies. Wat if Safcom does the same and weka’s calls at 6 bob also? Subscribers with their other 6 million+ contacts, will stay on this network, coz it’s easier than to go around changing yo’ mobile contact etc, etc..
Effectively, there will be 6 million people calling at 6 bob on one end and only 3 million on the other, it’s easy to see who’ll be wearing the trousers in that relationship!
What about Telkom’s wireless fones? It costs only 5.50 to call another Telkom subscriber anywhere in the country, yet the uptake isn’t close to the millions that Safcom has been able to rack up. Surely people should be ready to call at these good rates!
Unfortunately for them, however, the entry costs are a bit too steep. Other than having to buy a line for 1,000 bob, one has to get a brand new handset, coz the technology can’t work with GSM fones. So a cool 5,000 bob+.. to get a fone that you’ll hardly use to call at the celebrated rate of Kshs 5.50 to another Telkom number! It only requires a basic knowledge of arithmetic and economics, to know that you’d rather bamba 50 and call a lot more people @ 8 bob!
So that round Telkom Wireless loses 10 – nil. Unfortunately, they still think in the old mindset of charging people to become your customers! That usually doesn’t work very well. I can get a Safaricom or Celtel line for as little as 40 bob. Why on earth would Telkom charge me 1,000 shillings for a piece of metal? Imagine if it still cost you 2,500 shillings for a Safaricom line? They never learn, I tell you!
So my conclusion? Even a new mobile company will not be able to nudge Safaricom out of their massive market numbers. Unless of course they have a brilliant product, that’s incredibly cheap, different, innovative, and did I say bloody cheap? It’s only in
What do you think? Leave yo’ two cents worth of comment. Would love to here another perspective.
Should get to bed. Kesho I have a mortality meeting. We get to keep tabs on how many patients we got to kill during the month. More on that later.
Baadayez,
tHE mEdiCinEmAn.
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