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Equity Bank unveils its MVNO strategy
Rank: Member Joined: 1/14/2014 Posts: 178
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Safcom's recent attempt at reducing their Mpesa rates is a little too late and too obvious a reaction. Go for a business that any idiot can run – because sooner or later, any idiot is probably going to run it – Peter Lynch
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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And mr.market has approved equity carrying the day. "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Elder Joined: 12/11/2008 Posts: 2,306
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Wakanyugi wrote:murchr wrote:
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 CHARGESTo 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 CHARGESTo 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  Great men are not always wise, neither do the aged understand judgement...
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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Robinhood wrote:Wakanyugi wrote:murchr wrote:
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 CHARGESTo 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 CHARGESTo 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  Ok you win, the thing is SAfcon is working with known and tested data, so they know where the majority of those transacting lie and how they do it. 10 - 49 = 1 50 - 100 = 3 101 - 500 = 11 501 - 1,000 = 15 1,001 - 1,500 = 25 The rest dont care because they probably dont use it that oftenly anyway. Even YU charged "0" on their calls but they packed up and left. Equity should also brace themselves for the fight IF this thing takes off. And am for it dont get me wrong afterall the users get to gain. "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Member Joined: 2/20/2007 Posts: 767
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murchr wrote: Ok you win, the thing is SAfcon is working with known and tested data, so they know where the majority of those transacting lie and how they do it. 10 - 49 = 1 50 - 100 = 3 101 - 500 = 11 501 - 1,000 = 15 1,001 - 1,500 = 25 The rest dont care because they probably dont use it that oftenly anyway. Even YU charged "0" on their calls but they packed up and left. Equity should also brace themselves for the fight IF this thing takes off. And am for it dont get me wrong afterall the users get to gain. You have hit the nail on the head. With the data that Safaricom has, it can practically tailor charges to suit every individual who uses Mpesa. This big data when well utilised, and Safcom has the capacity to utilise it, will work to Safcoms advantage. One may argue that Equity may get access to Airtel network data but this will be miniscule compared to Safaricom and the data on Airtel network will probably not fit the Equity customer demographic. They must find it difficult....... those who have taken authority as the truth, rather than truth as the authority. -G. Massey.
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Rank: Member Joined: 2/20/2007 Posts: 767
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ngapat wrote: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 I think you are right. However, how will Equity make sure they dont lose out on transaction fees. They will have to collect them from somewhere, probably the vendor of whatever good or service one buys on the MVNO platform. Also, will they force all vendors to open Equity accounts. I think this is unlikely to happen. When it comes to access to mobile banking, KCB and M-shwari have preceded them and these two will not take encroachment on their tuff kindly also. So, the big question is, where will the expected billions in profits for Equity come from? Their 8 million customers may sign up but if they are not being charged to transact among themselves, how will Equity make money. If these customers transact with non equity persons, it will likely be with safaricom so both make money. They must find it difficult....... those who have taken authority as the truth, rather than truth as the authority. -G. Massey.
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Rank: Member Joined: 12/11/2006 Posts: 884
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tom_boy wrote:ngapat wrote: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 I think you are right. However, how will Equity make sure they dont lose out on transaction fees. They will have to collect them from somewhere, probably the vendor of whatever good or service one buys on the MVNO platform. Also, will they force all vendors to open Equity accounts. I think this is unlikely to happen. When it comes to access to mobile banking, KCB and M-shwari have preceded them and these two will not take encroachment on their tuff kindly also. So, the big question is, where will the expected billions in profits for Equity come from? Their 8 million customers may sign up but if they are not being charged to transact among themselves, how will Equity make money. If these customers transact with non equity persons, it will likely be with safaricom so both make money. Its true Quite a considerable amount of Equity bank profits comes from transactions fee and if they lose them, it would affect their bottom line. But Equity and other banks need to think of new revenue sources (expand their core lending business)since safaricom has invaded their turf and they are already losing the transaction fees anyway. I know of so many work colleagues who transfer all their salaries from their bank account into Mpesa and withdraws it bit by bit. Mpesa has become bank accounts for a sizable number of people. The amount of deposits held in mpesa accounts should be a cause of worry for banks. “Invest in yourself. Your career is the engine of your wealth.”
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Rank: Member Joined: 8/19/2014 Posts: 125
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Now Equity stock becoming a bit overpriced...PE ratio past 15 now. Locals selling foreigners buying
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Rank: Member Joined: 7/24/2010 Posts: 236 Location: nairobi
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Equity shareholding as at 31st Dec 2013.
herios 905,162,550 24.45%
britam 263,455,230 7.12%
employees 138,534,200 3.74%
JM 127,809,180 3.45% 4.88%(britam + employee)
You see how much jm makes for every sh 1.00 rise in share
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Rank: Veteran Joined: 4/16/2014 Posts: 1,420 Location: Bohemian Grove
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innovator wrote:Equity shareholding as at 31st Dec 2013.
herios 905,162,550 24.45%
britam 263,455,230 7.12%
employees 138,534,200 3.74%
JM 127,809,180 3.45% 4.88%(britam + employee)
You see how much jm makes for every sh 1.00 rise in share on a good day, he can mint 700 million #Lanes
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Rank: Member Joined: 7/20/2011 Posts: 161 Location: nairobi
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tom_boy wrote:Wakanyugi wrote:tom_boy wrote:This thin sim biashara will not be a walk in the park for Equity. I doubt they will make any money for the first 2 yrs. Kenyans are peculiar people and we know that price alone is not a major motivator for people to jump ship especially when it comes to telecoms. In addition, Safcom is able to counter any price reductions likely to affect its market. In short Kenyans will benefit from lower prices but it remains to be seen whether this will translate to significant profit for Equity. I don't share your pessimism. Here is why: 1. Equity already has over 9M members. That is a massive base from which to start. 2. JM has announced that they will be giving the thin SIM to any Kenyan, not just 'Meba' - his target is the 27M Kenyans with a phone. 3. Money transfer at 25 bob, max; plus all the benefits of electronic banking. 4. And don't forget that what Equity has is basically a license to do telkom, not just banking. (The Safaricom strategy has been turned against Safaricom) 5. The nationalism card - Equity is our bank versus, Safaricom is foreign owned/led....etc What does Safaricom have to counter all this? I am not being pessimistic, just realistic. A market is divided into segments. Out of the 9 million Equity accounts, probably only about 5 million use Equity as their primary bank, another 2 million use it for long term savings (kwa sababu by the time one has lined up at the branches to access the money, you must really need it) and another 1 million may be dormant accounts (like mine). The Equity customer probably deals in small many transactions per month. This is the customer that Safaricom has already targeted by reducing Mpesa charges to probably approximate those of Equity. I doubt non Equity bank customers will suddenly en-mass join Equity bank just because there is a new sim card with slightly lower "mpesa" charges. The product has to offer more than just price. The price wars of yester years may have affected Safaricom profits but, Safaricom still made profits. Their competitors still made losses despite the price wars. I still think thin sim will not be a walk in the Park for Equity. It may not lead to massive profits as widely expected. Guys need to style up btw... those who have equity accounts and a little exposed know that there exists an app called EAZZY 247. You can basically transact by sending cash to any bank account, mpesa or withdraw from an equity agent. Some of us never line up! Patience. You cannot have a baby in one month by impregnating nine women....
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Rank: Member Joined: 7/20/2011 Posts: 161 Location: nairobi
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quicksand wrote:Wakanyugi wrote:tom_boy wrote:This thin sim biashara will not be a walk in the park for Equity. I doubt they will make any money for the first 2 yrs. Kenyans are peculiar people and we know that price alone is not a major motivator for people to jump ship especially when it comes to telecoms. In addition, Safcom is able to counter any price reductions likely to affect its market. In short Kenyans will benefit from lower prices but it remains to be seen whether this will translate to significant profit for Equity. I don't share your pessimism. Here is why: 1. Equity already has over 9M members. That is a massive base from which to start. 2. JM has announced that they will be giving the thin SIM to any Kenyan, not just 'Meba' - his target is the 27M Kenyans with a phone. 3. Money transfer at 25 bob, max; plus all the benefits of electronic banking. 4. And don't forget that what Equity has is basically a license to do telkom, not just banking. (The Safaricom strategy has been turned against Safaricom) 5. The nationalism card - Equity is our bank versus, Safaricom is foreign owned/led....etc What does Safaricom have to counter all this? 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. Quicksand.... I can CONFIRM there are no problems! Patience. You cannot have a baby in one month by impregnating nine women....
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Rank: Member Joined: 7/20/2011 Posts: 161 Location: nairobi
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tom_boy wrote:1. With MVNO Equity stands to eat into every product that Safaricom offers - money transfer, data and voice.
How is this possible. If Equity to Equity transfers are free, the bank will stand to loose money as people will not use the payable services. If transfer is from Equity to another provider, interconnection charges will apply so no way it will be free.
2. Safaricom does not threaten Equity's core product - banking - and therefore can not play the kind of offensive game they did on Airtel.
Safaricom is not interested in Banking per se. They want the money transfer business. For Equity to access non Equity money transfer business, charges will apply therefore not much advantage there.
3. To beat M-Pesa Equity is offering a cost of 25 shillings maximum on money transfer, compare this with 300 plus that M-pesa charges you. And you don't even have to change your Phone/M-pesa number to use the thin SIM, only the prefix.
The 300 charge is a maximum amount. For the amounts that Equity members usually transfer, I am sure Safaricom can match the pricing.
4. For the 9M account holders the cost of most MVNO banking services, money transfer included, is ZERO. I bet with this kind of deal even you will reconsider your dormant account.
Here, Equity will have shot themselves in the foot. People will opt to use this no cost services at the cost of using payable cash withdrawals and transfers at the bank. They may recoup this though by laying off staff and achieving better efficiencies
5. All this before you have even factored in the operating efficiencies and market penetration that Equity will reap from moving most of their customers to a virtual banking platform. MVNO is a game changer and Equity should make money from it from the get go.
Safaricom has way more experience in the telco market and money transfer market. Equity will be hill climbing and will soon discover free does not sell in Kenya. Ask Yu mobile
MVNO is good but I think it will not make that much money for equity, especially in Kenya. In other markets without a well established mobile money transfer option, Equity will run away with the cake, that is for sure. The Kenyan Market will be hard to crack though. Tom_boy perceptions...like yours above are not facts. There exists a very large, very large of middle class guys who bank with equity and those Mpesa charges are very high. Think of a shop in town. The shop owner may need to buy stock kila day of 50000. Why spend 110 bob as opposed to 25 bob every single day? Patience. You cannot have a baby in one month by impregnating nine women....
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Rank: Member Joined: 7/20/2011 Posts: 161 Location: nairobi
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tom_boy wrote:1. With MVNO Equity stands to eat into every product that Safaricom offers - money transfer, data and voice.
How is this possible. If Equity to Equity transfers are free, the bank will stand to loose money as people will not use the payable services. If transfer is from Equity to another provider, interconnection charges will apply so no way it will be free.
2. Safaricom does not threaten Equity's core product - banking - and therefore can not play the kind of offensive game they did on Airtel.
Safaricom is not interested in Banking per se. They want the money transfer business. For Equity to access non Equity money transfer business, charges will apply therefore not much advantage there.
3. To beat M-Pesa Equity is offering a cost of 25 shillings maximum on money transfer, compare this with 300 plus that M-pesa charges you. And you don't even have to change your Phone/M-pesa number to use the thin SIM, only the prefix.
The 300 charge is a maximum amount. For the amounts that Equity members usually transfer, I am sure Safaricom can match the pricing.
4. For the 9M account holders the cost of most MVNO banking services, money transfer included, is ZERO. I bet with this kind of deal even you will reconsider your dormant account.
Here, Equity will have shot themselves in the foot. People will opt to use this no cost services at the cost of using payable cash withdrawals and transfers at the bank. They may recoup this though by laying off staff and achieving better efficiencies
5. All this before you have even factored in the operating efficiencies and market penetration that Equity will reap from moving most of their customers to a virtual banking platform. MVNO is a game changer and Equity should make money from it from the get go.
Safaricom has way more experience in the telco market and money transfer market. Equity will be hill climbing and will soon discover free does not sell in Kenya. Ask Yu mobile
MVNO is good but I think it will not make that much money for equity, especially in Kenya. In other markets without a well established mobile money transfer option, Equity will run away with the cake, that is for sure. The Kenyan Market will be hard to crack though. This simply a promotional gimmick. Strive first to bring in the numbers then make money from those numbers. Patience. You cannot have a baby in one month by impregnating nine women....
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Rank: Member Joined: 7/20/2011 Posts: 161 Location: nairobi
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murchr wrote:Robinhood wrote:Wakanyugi wrote:murchr wrote:
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 CHARGESTo 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 CHARGESTo 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 Ok you win, the thing is SAfcon is working with known and tested data, so they know where the majority of those transacting lie and how they do it. 10 - 49 = 1 50 - 100 = 3 101 - 500 = 11 501 - 1,000 = 15 1,001 - 1,500 = 25 The rest dont care because they probably dont use it that oftenly anyway. Even YU charged "0" on their calls but they packed up and left. Equity should also brace themselves for the fight IF this thing takes off. And am for it dont get me wrong afterall the users get to gain. Thats whyere you are wrong. Its not that WE dont care... We did not have a choice! lol Patience. You cannot have a baby in one month by impregnating nine women....
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Rank: Member Joined: 6/26/2008 Posts: 16
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The truth is SAFcon attacked Equity first with Mshwari. Instead of just defending his turf, JM opted to go for Bob right from his bedroom, punching him as he ran out of the house, lit fires all over the homestead and even threw tear gas at Bob's relatives. However the aggressor remains SAFcon (the bully), now members' money is protected from this bully for good. He should have known better than pick on the wrong guy.
JM is not interested in telecoms, but if he can teach this bully a few lessons and save on his ICT expenses, and reduce crowds from his bank halls, why not? In fact, he might end up making a few more shillings when his members call from the thin sim instead of their SAFcon. Once you become a member, you will make calls, do shopping, pay Ma3s, chamas, schools fees, bills and everything else, without a single coin leaving JM's strongroom. Deposits will never leave his bank. They are permanently FIXED. Only their owners will change. This man is dangerously REAL.
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Rank: Member Joined: 6/26/2008 Posts: 16
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The truth is SAFcon attacked Equity first with Mshwari. Instead of just defending his turf, JM opted to go for Bob right from his bedroom, punching him as he ran out of the house, lit fires all over the homestead and even threw tear gas at Bob's relatives. However the aggressor remains SAFcon (the bully), now members' money is protected from this bully for good. He should have known better than pick on the wrong guy.
JM is not interested in telecoms, but if he can teach this bully a few lessons and save on his ICT expenses, and reduce crowds from his bank halls, why not? In fact, he might end up making a few more shillings when his members call from the thin sim instead of their SAFcon. Once you become a member, you will make calls, do shopping, pay Ma3s, chamas, schools fees, bills and everything else, without a single coin leaving JM's strongroom. Deposits will never leave his bank. They are permanently FIXED. Only their owners will change. This man is dangerously REAL.
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Rank: New-farer Joined: 8/11/2014 Posts: 72 Location: Nairobi
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What has caused the sudden rise in Equity share price and will it remain that hire? Bulls make money,bears make money and pigs get slaughtered.
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Rank: Elder Joined: 12/2/2009 Posts: 2,458 Location: Nairobi
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A lot of emotions on Member, similar sentiments driving the share price... belief in member.
But this battle is real... swollen faces, bruised cheeks and bloody noses shall follow.
I dont buy the idea that this thing is ment to lock in equity customers to its platform. So what will the transactions be like?
Do you have an equity account? then please pay me via mvno.
There is a gap Mpesa closed, that of moving around from one bank to another so as to pay your rent or school fees etc. There is a reason why not everybody is in one bank or telcoms. I dont see myself reactivating the Equity account so as to pay rent to my landlord with free MVNO.
This battle will go down to who can sustain the war longer. any moves Equity does to counter Mpesa, be it on cost, patriotism (where Safcom also threw out Kencell), etc will be met with equal measure. Price drop for price drop, agent commission for agent commissions.
At the Sideline Simba will be waiting for Safaricom to come asking for help. The enemy of your enemy is your friend.
If i were to distribute new stock purchases i will bet 40% Safcom shares (longterm), 40% Simba (Mid term), 20% Member(short term, to ride the hype)...
unless there is some hidden card down under. this is one tough battle for Member, Mpesa only downside is the interruption to its current cash cow.
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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Just my two cents: considering the low charges and interoperability of the thin sim product safcom are in trouble. Personally I would not use mpesa if a cheaper service is available. The only possible downsides for equity is mal ware and airtel failing to uphold good network service. If equity markets this thing properly and gives loans at 1-2 percent then shylocks(25-30percent),credit cards (3-6.5),mshwari(7.5) and saccos(12percent)should reinvent themselves. Equity may not be interested in voice, data and sms but if jm smells blood on this front he will definitely move in for the kill. The main purpose of the stock market is to make fools of as many people as possible.
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