The debate of Safaricom dominance does not seem to be going away. It was the first agenda item for MD Safaricom Bob Collynore on his return from lengthy sick leave to make appearance at the National Assembly ICT committe who picked cue from CCK who are hell bent to slow Safaricom growth and dominance while flashing the dominant player card.
Safaricom did not succeed from the blues , it was made to made to happen by smart and visionary leadership whose foundation was set up by Michael Joseph and then followed by current MD Bob Collymore.
While CCK is fixated with Safaricom dominance they don’t appreciate the fact that Safaricom was late to take off from the starting block thanks to GOK red tape then where Kencell now Airtell had the head start .
Around 2002 Safaricom had 918,779 subscribers while Kencell now Airtell had 1,627,378 . The rest is history . I was one of the Kencell pioneer subscribers with a 0733 line but I left them on my own accord to a more customer centric provider.
In 2000’s While Kencell were busy chasing corporates and billing per minute, Safaricom opted to go for Wanjiku and charge per second . While Kencell focused on urban centres Safaricom went to the villages . Many urbanites holding a kencell line realised that their rural folks were all on Safaricom .We all recall the fight then between the two firms and at one point Kenyans were described as peculiar lot by MJ . Indeed we are peculiar to date since we are now unhappy with runway success and we want to slow down Safaricom. Safaricom also opted to go big on data and avoid a bloody unnecessary war on voice. Later Mpesa came and that was the last nail on Airtell coffin and other providers and Safaricom was airborne.
Market dominance is not a bad thing if the dominate player is not abusing that monopoly and Safaricom have really not abused their position. For anyone to insist that Safaricom must share it’s infrastructure is akin to asking a new state of the art hotel to allow a dingy hotel next door to acess and use Its kitchen .
CCK is now seeking interventions that will not allow Safaricom to introduce any products or services unless they are replicable by other operators. What hogwash .
To quote Bob Collynore ” The success we enjoy is the result of being a purpose-driven, insights-led, customer-obsessed business with a robust strategy that we execute with great precision.”
Domestic monopolies can become dominant in their own territory and then penetrate overseas markets, earning a country valuable export revenues. This is certainly the case with Microsoft. This is what CCK and GOK ought to be saying and not to attempt to slow down Safaricom.
It has been consistently argued that monopoly power is required to generate dynamic efficiency, that is, technological progressiveness. This is because:
High profit levels boost investment in R&D. Safaricom invest loads of money in research and new products. Innovation is more likely with large enterprises and this innovation can lead to lower costs than in competitive markets. The cost of Safaricom product and services is affordable and more importantly reliable .
In simple economics a firm needs a dominant position to bear the risks associated with innovation.
Firms need to be able to protect their intellectual property by establishing barriers to entry otherwise, there will be a free riderproblem. The likes of Airtell and Telkom should not be allowed to harvest where they never sowed. Safaricom were forced to set up masts in far flung regions and the ROI is almost nil while the competition would like a free ride on same.
The million dollar question then, Why spend large sums on R&D if ideas or designs are instantly given acess to rivals who have not allocated funds to R&D?
Safaricom may feel big by Kenyas standard but when placed at global scale , it just entered recently the top 10 telecommunication company in Africa let alone globally.
Google and Microsoft gained monopoly power through offering innovative new products. The same applies to the likes of Apple and Amazon. In this case, it is their market dominance which comes from being innovative and meeting a consumer demand.
It is hig time we closed this dominate player debate and allowed Safaricom a Kenyan company to continue to focus on what makes them tick. Let us not waste their time with unnecessary summons that add no value to them, be it shareholders and even to us the subscribers.
To our regulators and legislators instead of celebrating our only homegrown example of a world leading corporate, you are busy trying to emasculate it at the behest of a company from another continent and country . India jealously guards it’s corporate frontiers, and aggressively promotes Indian corporates to compete at global levels. Imagine for once would India ever entertain Safaricom entering that market and asking for Bharti Airtel to allow Safaricom acess to all her infrastructure including intellectual rights ?
To CCK and Legislators ask and encourage Safaricom to go beyond our borders and replicate their success out there. At some point Sumsung , Toyota and even Tata were playing small in Korea , Japan and India respectively . We should be asking and pushing Safaricom to go and conquer the world . I am afraid someone somewhere is trying realy hard to arm twist Safaricom .We cannot also not rule out a financial shakedown in a country where serious firms have not been spared.
If GOK and our Legislators would like to help the consumer please head to Kenya Power & Lighting that has the monopoly to keep us in darkness not to mention the ever increasing power bills .
It’s about time you left Safaricom alone unless you really miss once upon a time useless Kenya Posts & Telecommunication.
Kenya Tourism Federation