Safcom doesnt want to be called a bank at all....no way

I think the tomboy is right. Your optimism is bubbly. JM is not an idiot and the product will succeed, may be even thrive, but Mpesa didnt become a juggernaut overnight. It is where it is cause of huge investment, technology and brilliant strategy.
Many Kenyans are annoyed with the current predatory pricing of Mpesa, but just cause guys are pissed doesn't give JM and the thin sim the deep technological depth required to run it without a hitch. Mpesa is seven years old now, yet you still get outages, slow speeds and deadbeat agents who cant manage float (you try six or seven agents before one where you are able to deposit).
All these things Equity will face and have to overcome. Safaricom has more serious technology than Equity/Airtel combo, and while Equity is tackling teething problems, Mpesa will not be sitting pretty -it will be a brutal fight in which Mpesa has thrown the first punch even before JM got the product out of the door.
Things will get interesting from a technological side -which for me is more interesting as a techie. My feeling is Equity is already having problems, otherwise they should have launched widely by now.

Let us wait and see.

I did not take this MVNO technology seriously until I saw Safaricom's reaction - it takes some serious threat to make this behemoth almost pee their pants as they have been doing recently.

Then I listened to Mwangi explain his strategy a number of times and I realized Safaricom (or at least M-Pesa) have reason to run scared.

MVNO is seriously disruptive and Safaricom seems to have all the downside. When a competitor threatens your core business you look for a way to threaten his. When you can't (and superior technology plus 7 years experience are no substitute) you worry.

This war is clearly asymmetrical and, like you say, Mwangi is not stupid. He is certainly not Airtel who arrived here he with a new-kid's disadvantage and untested models to boot. Mwangi knows the terrain and he wrote the manual on growing 'bottom of the pyramid' business.

We shall see.

It might be a while before we see, so lets continue the debate, right mano?
Ok, the way I see it,....a foe who is mortally threatened is very dangerous. Safcom running very scared is the appropriate reaction to this threat. If they hadn't, had they kept quiet and boasted how unassailable their position I would have written them off as lazy, incompetent and ripe for a takedown. That fear has people hatching strategies day and night. Equity blundered very badly there with their pricing plan announcement.
Now there are some costs, very huge costs that come with becoming a Telco and many here simply do not see them, they simply see profits and the counter really taking off. The costs have to be financed from somewhere· Let me elaborate and temper the enthusiasm a bit:
1. The license. I do not know the exact amount Equity paid for its MVNO, but these licences usually run into billions.
2. The network. Let no one cheat you, the red network is s***. It does not degrade badly cause there arent many guys on it. Their managememt miscalculated with 3G rollout so that coverage is not upto par. These data and voice revenues that Equity might be expected to pull from that aspect of the business? Exaggerated.
3. Comms regulations will kick in. Those are expensive to maintain. To mention a few, must maintain 7 year archives. Need a call center. Need to maintain service levels above some threshold. They demand infrastructure and also "provision for" accounting resources thingies. One telco was docked 300 mill (or was 500?) for low service quality.
4. Expertise, starting costs: The red network had its own money service, which they bungled. Equity will need to control the service directly, and not proxy through the network's old system if they hope to succeed. New and serious IT infrastructure is required so that the 9 million already in their stable start off happy and without a hitch.
5. Security: From what I heard, there is no encryption on the thin-sim. The base sim at least has DES. This has to have some Equity people worried, I see a very high probability someone will write malware to access the sims naked API and some interesting court battles will ensue. Perhaps this is what is keeping them?
6. What might Safcom do? Equity will force them to be less greedy, prices will come down, agents get higher commissions.
7. Open Mpesa to other banks. These other banks are spectators in the Equity/Safaricom axis. They would love a piece of the pie, opening the system up adds appeal, staves off the impending annihilation.

All in all? It does not change much, Equity's thing becomes a good money earner for Equity but not the decapitating sword of wrath people are making it out to be. There is no lunch to be eaten here. 60-40 market split for Safcom-Equity after some 5 years ofrough battle.
But you are all entitled to hype it, watch the stock skyrocket and make a killing I hold a dimmer view.

Equity doesn't mind much about revenue from cash transfer service but rather attracting low cost deposits.
This is the reason they will allow cash transfer within their network at no cost. The catch here is to enable people even buy from mama mboga and pay through MVNO hence Equity will have a large pool of low cost deposits which they can loan and get high profit margins. You will not see the need to withdraw cash meaning the money will just be revolving within Equity bank and only changing owners.
Imagine paying at "iko Choo" with MVNO

100,000? Really? That doesn't sound fair.
Your point #7 also applies to the network, Equity will want to own it. This infrastructure lease-managed-by-others will unravel, just like red's outsourcing to IBM and NSN has turned out not too rosy. You want your own talent on the controls, this SLA thing is very dicey.

@ngapat, this is already happening with Safaricom all over, Equity will not have an advantage here Lipa na M-pesa is getting strong footing as well.

i believe safaricom charges for lipa na mpesa

Mpesa is cheaper numbers dont lie

You may want to ask for a refund from whoever taught you Maths.

Here are the numbers:

SAFARICOM - MPESA to MPESA CHARGES

To send Ksh 10 to 2500 Will cost you from Ksh 1 to 40

To send Ksh 2501 to 70,000 Will cost you from Ksh 55 to 110

PROPOSED EQUITY MVNO CHARGES

To send Ksh 10 to 2500 Will cost you from Ksh 0.1 to 25 (1%)

To send Ksh 2501 to 70,000 Will cost you a flat fee of Ksh 25

To send any amount from Equity to Equity will cost ZERO