Tuesday, June 19, 2007

And so the war is on!

Safaricom responded with a hummer yesterday announcing upto 50% reduction in call charges in some cases. its a sure signal to celtel and telkom kenya that they have got the muscle and they wont hesitate to use it. this sign is also good for the investor public who are angling to take a rightful share of the pie and the war once Safaricom goes public. Safaricom however is flexing its muscles even more with a national roll out of the 3.5G network in the offing. with this new technology, voice will now ride on the data network and speeds will be much higher. It sure spells the death of the Internet service providers as we know them. In fact the acquisition of the pan african provider Africa Online by Telkom SA is a sure signal that things are going to be thick. Telkom SA has re engineered itself and is all out to slice the mobile telephony pie in Kenya just like they have done already in Nigeria. Telkom SA is an rough and aggressive if not abrasive competitor and all the peers in Kenya better be warned. But even Telkom kenya is also not joking with anyone. if the map of their wireless coverage is anything to go by, the competition is just getting started. indications are that their service is so popular that they are unable to keep up with the demand and are unable to print enough scratch cards popularly known as credit in these parts. on its part, Telkom kenya has gone into the offensive and poached two leading managers from Safaricom. Thats a serious warning and if celtels announcement on their intention to drive the prices further down is to be noted then safari com better rush back to the drawing board. they will have to work harder for their 6.5Million customers who still feel that Safaricom's profits are not justified and that the rates are still too high. the public feels that Safaricom just has too much money! However given that last year that huge profit was got from only about 4.5million subs, it means that this year it will be even higher given there were more subs thanks to some aggressive marketing and innovation like the bamba 50 in the past year. But for us investors, we keep on wondering what is taking the cooking of this dish so long!

In another development, its hats off to Nakumatt for making the 30 best retailers globally. after the award won by KCB , it makes you jivunia kuwa mkenya. Nakumatt IPO is promised to be in 2009


  1. We live in exciting times. The more the competition the better Safaricom have been enjoying themselves too much and yet even with the reductions they still have the highest tarrif in the land 30 bob per minute.

  2. interesting times indeed.hope this will see rates come down to the sub-10/- level. all the same,isn't it about time someone launched a niche mvno (virtual mobile) similar to virginmobile?

  3. With compe coming into town, there can only be one way for charges to go and that is south! Remember just early this year Telkom Kenya used to sell their RUIM cards for 1000/-! Now they are giving them away for free! Watch this industry for the free calls weekends are not so far away!

    click to http://assidous.blogspot.com


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