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Why safaricom must reduce its costs and expenditures to remain a viable stock in future
Rank: Chief Joined: 1/3/2007 Posts: 18,137 Location: Nairobi
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Much Know wrote:Indians are obsessive (even nonsensical) about saving, they switch of vehicle lights in lit roads to "save the battery". Cheap is sometimes cheap. LOLest... Lakini, there is something to be said about being parsimonious... After all, wealth is NOT what you earn but what you SAVE... Last time I checked... India has become a giant... We need to learn from them... Also, PLEASE let the low rates run for ages!!! I am saving a bundle in phone costs! Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,137 Location: Nairobi
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KulaRaha wrote:youcan'tstopusnow wrote:Wow! So every Safaricom subscriber contributes 19 dollars to yearly profits while Bharti customers contribute only 2 dollars? Hmmm... Call it what you want, but Safcom has been screwing people in the ass! Hallelujah my brother...you have seen the light!! And every Safcon subscriber uses 75 minutes while Bharti ones use 450. Looks like we were being screwed not just in the ass.... What infrastructure assistance has Safcon brought? They bought all that fibre and 3G with your money, not theirs! Don't believe the hype.... AMEN... Can you imagine there are some who actually ENJOY being screwed & are asking for MORE PLEASE... I am happy to be with Zain/Airtel... Even YU... lakini no safcon (except for data & M-Pesa, for now)... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,137 Location: Nairobi
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I wonder if Telkom/Orange is pushing ndemo to complain about low calling costs??? Safaricom will survive (other income streams + dominant carrier) Zain/Airtel have big bucks behind them... Telkom/Orange needs support... I think they are the folks complaining! YU - No idea what they will do! Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa
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Rank: Chief Joined: 1/3/2007 Posts: 18,137 Location: Nairobi
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Yep, the government is about to step in to RAISE the calling rates! http://www.businessdaily...1/-/gycyo6/-/index.html
All this to protect the inefficient Telkom... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Veteran Joined: 7/24/2008 Posts: 781
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I dont think they will...I believe the french government will put a lot of pressure on GOK....If u study french business models in africa you would really hate them...telkom will try its best to hoard data bandwith and frustrate efforts for affordable internet The utimate goal of investing is to buy low sell high;if we re-write this core equation in psychology terms it becomes buy fear sell greed.
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Press releaseMy Dear Kenyans, The government has been watching with great concern at the recent mobile price wars, and we have decided to step in and bring order to the sector. Henceforth, all Kenyans will start paying 25/= on-net and 52/= off-net for their calls. This is good for Kenya and for Kenyans as it will: - assist Orange/Telkom survive and keep providing us with landlines that dont work, have 120 faults per every 100 lines, and maintain a bloated workforce of friends and relatives who got the job because they know someone; - Ensure Safcon can repatriate at least $100M of Kenyan's money to London, so that UK shareholders are happy and have enough money to hit the pub, and ensure tiny local shareholders keep getting their miniscule dividends yearly. Dear Kenyans, Im sure you'll all be happy, as these rates will assist in progress of Kenya. You will still continue to enjoy exorbitantly priced low quality internet despite three cables landed in Mombasa. This progress must be defended at all costs. Yours B Ndemo Defender in Chief of failing parastatals and unrealistic corporate profits. Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 11/7/2007 Posts: 2,182
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hakuna kitu kama hiyo tumekataa hiyo? Mass action! LOVE WHAT YOU DO, DO WHAT YOU LOVE.
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Rank: Veteran Joined: 11/11/2006 Posts: 972 Location: Home
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@Kularaha Wish you had used the line in the Safaricom advert that goes ... As many as sort of a similar opinion say aye...
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Rank: Veteran Joined: 11/2/2006 Posts: 1,206 Location: Nairobi
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@VVS, where in the document does it indicate that prices will go up? Formally employed people often live their employers' dream & forget about their own.
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Rank: Elder Joined: 12/6/2008 Posts: 3,549
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Rank: Chief Joined: 1/3/2007 Posts: 18,137 Location: Nairobi
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KulaRaha wrote:Press releaseMy Dear Kenyans, The government has been watching with great concern at the recent mobile price wars, and we have decided to step in and bring order to the sector. Henceforth, all Kenyans will start paying 25/= on-net and 52/= off-net for their calls. This is good for Kenya and for Kenyans as it will: - assist Orange/Telkom survive and keep providing us with landlines that dont work, have 120 faults per every 100 lines, and maintain a bloated workforce of friends and relatives who got the job because they know someone; - Ensure Safcon can repatriate at least $100M of Kenyan's money to London, so that UK shareholders are happy and have enough money to hit the pub, and ensure tiny local shareholders keep getting their miniscule dividends yearly. Dear Kenyans, Im sure you'll all be happy, as these rates will assist in progress of Kenya. You will still continue to enjoy exorbitantly priced low quality internet despite three cables landed in Mombasa. This progress must be defended at all costs. Yours B Ndemo Defender in Chief of failing parastatals and unrealistic corporate profits. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,137 Location: Nairobi
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bird_man wrote:@VVS, where in the document does it indicate that prices will go up? Not explicitly but seemed to hint as much... "Government has heavily invested in the telecoms sector. We would not want to remove money to support Telkom Kenya. They are supposed to make business sense." Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 11/13/2008 Posts: 1,565
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As much as low tariffs are good, lets try to look at the bigger picture:
1 - All the airtime dealers (and I do not mean distributors)...the guys who get 5% of the value of cards they sell...are hurting...they are moving almost half the volumes. Take a regular kiosk person, who would sell 100 cards of Kshs 20 each every day (total = 2000 and 5% = Kshs 100). His daily profit is now Kshs 50.
2 - Telkom Kenya - is still partly government owned. The price wars are killing its mobile subsidiary Orange and this goes against fair competition practices. never mind the debacle regarding Telkom's assets. This price war will invariably kill Orange. Fixed lines are not worth much revenue - its mobile.
3 - A bit of a lecture on telco market liberalisation to explain where we came from: Lets think back to KPTC (and other similar state corporations from other countries). The liberalisation and privatisation wave started in Africa in the mid 90s. In Kenya this started around 97-98. Ideally what should happen, after unbundling the entity (into three parts - an independent regulator, a postal operator and a national telco), if for the ensuing telco to undergo a "strengthening" process to prepare it for competition. This process would typically be given to an experienced player as a management contract and would entail improving processes, staff cuts, etc etc - to make it a lean and mean operation capable of holding its own against private operators.
As soon as this happens - perhaps after a year or two, then it could be PRIVATISED or partially privatised to allow for fresh capital injection and make it somewhat autonomous of government.
After this, THEN they could licence additional operators to compete with it - protecting national interests and ensuring a level playing field.
In Kenya this process was so BOTCHED and F--KED up in the 90s and early 00s. Telkom Kenya should ideally have been partially privatised at the same time as Kencell and Safaricom were licenced. It should have divested from Safaricom and got its own mobile licence (as has now happened in RSA with telkom south africa).
So, long and short, we are paying to price for political interference and vested interests that played out in the late 90s and early 00s.
Telkom Kenya must now be protected and not allowed to atrophy.
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Rank: Chief Joined: 1/3/2007 Posts: 18,137 Location: Nairobi
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@djinn: Nice summary... flawed conclusion! Telkom Kenya is now 'private' [owned in part & controlled by Orange]... If it dies, it dies... end of story! Why should I pay for its inefficiency through my taxes and/or higher charges? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Djinn, why must Telkom Kenya be protected? Pls explain. I don't understand. Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 10/13/2009 Posts: 1,950 Location: in kenya
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In india a call goes for kido 1.50- 2.00 which I think if safaricom were to make the current promotion a tariff they would be in the same level with Bharti airtel- India. Players in india are contemplating Going per minute billing rather than per second billing.The reason being its unsustainable to maintain such low cost while charging per second.I dont know if this will be replicated here . Bharti airtel is so successful because apart from low cost tariff they managed to negotiate with their infrastructure suppliers to be paid on per second billing that is they are paid at the rate at which the infrastructure is being used (I presume).This not forgetting they have a subsidiary that concentrates on infrastructure development (building of masts) Whats more intriguing is that they haven't rolled out their 3g network yet , they are still on 2g. this is to say safaricom should first exhaust the 2g and 3g spectrum before going full swing with the 4g. '......to the acknowledgment of the mystery of God, and of the Father, and of Christ; 3 In whom are hid all the treasures of wisdom and knowledge.' Colossians 2:2-3
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Rank: Elder Joined: 2/7/2007 Posts: 11,935 Location: Nairobi
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Telkom Kenya must be protected my bad!....Do i care if they closed shop yesterday? Mr. PANICKY; “These prices are not sustainable. While we expected the prices to drop, we did not expect by such a large margin,” said Michael Joseph, outgoing Safaricom CEONothing great was ever achieved without enthusiasm.
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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selah wrote:In india a call goes for kido 1.50- 2.00 which I think if safaricom were to make the current promotion a tariff they would be in the same level with Bharti airtel- India.
Players in india are contemplating Going per minute billing rather than per second billing.The reason being its unsustainable to maintain such low cost while charging per second.I dont know if this will be replicated here .
Bharti airtel is so successful because apart from low cost tariff they managed to negotiate with their infrastructure suppliers to be paid on per second billing that is they are paid at the rate at which the infrastructure is being used (I presume).This not forgetting they have a subsidiary that concentrates on infrastructure development (building of masts)
Whats more intriguing is that they haven't rolled out their 3g network yet , they are still on 2g.
this is to say safaricom should first exhaust the 2g and 3g spectrum before going full swing with the 4g.
Selah, you are wrong. Calls in India cost 50 paise, which is equivalent to our 0.80 cents. Per second. Reliance gives u unlimited sms for 1 rupee ie 1.65 shillings per day. Business opportunities are like buses,there's always another one coming
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Rank: Veteran Joined: 11/2/2006 Posts: 1,206 Location: Nairobi
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"Telkom Kenya must be protected...." Please explain why again?Those are the same guys who were so arrogant for all those years they could have used to get ahead in the game.Why should we pay for their mistakes? Formally employed people often live their employers' dream & forget about their own.
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