KENYAN MOBILE WARS-Who is losing?


When the mobile companies lowered their calling rates we all celebrated and for the consumer nothing was sweeter than the free calls offered by some operators to kshs 2 per minute on some networks. While we celebrated I wondered whether the economists at treasury who crunch numbers were thinking about the overall effect this would have on the economy.

That calls are now cheaper I great but how much are people spending on airtime, which is the backbone of the industry. Sale of airtime is what has driven the growth of the industry and has allowed a company like Safaricom to enjoy the tremendous growth that it has enjoyed for the past 10 years. With this growth we have seen growth of businesses from the mpesa agent in far flung Turkana to the safaricom dealers smack in the middle of Nairobi town.Safaricom currently employs over 4000 people and has some of the brightest and best in the industry, from the mpesa revolution to the catchy ads ,the company has emerged as the biggest tax payer year in year out.

Last year Safaricom emerged as the most outstanding tax payer followed whether the by the East African Breweries which goes to show Kenyans talked more than they drink. With the lowering of call rates I doubt whether the taxman will be receiving such a huge payout anytime soon. That fact alone should be worrying the Minister of finance as it will definitely affect his budget come next June.

Safaricoms IPO was also among the most exciting things in the history of stock markets where it was oversubscribed by 532% ,the share price has been stagnant for long periods with the highest it has got to being kshs 7.The company has a majority of Kenyan shareholders and while there has been a lot of bickering on its dividends we are left to wait and see what the company will declare next year.

With the interconnection rates set to fall down to 0.87cts by the year 2014 I am hoping that someone at CCK had put a lot of thought into these rates and how they would affect the economy before they set out to regulate the industry.

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