By Charles Kimani: I think the thin sim strategy is brilliant...in theory.
However, I am also wondering just how wise it is to place the success of your business model at the mercy of a hostile, powerful and uncooperative business rival.
What if - 6 months after launch, for example - Safaricom decide to upgrade all their sim cards (genuinely or otherwise) just when Equity is in the middle of a critical (probably expensive) product rollout?
What if Safaricom customer service and dealer/retail channels start advising subscribers who are having issues with their lines that the thin sim is the cause of their problems and show them how to remove it?
How will Equity map their processes and logistics with the Safaricom SIM replacement processes? Will Equity subscribers need to remember to make an extra stop at an Equity outlet to have their thin sim re-attached once they do a sim swap? How easy is it to attach these thin sims?
We have previously seen smart sabotage tactics bring down SAB Miller ambitions in the Kenyan market. Equity - in my opinion - is giving too much firepower to a determined competitor. It might be cheaper in the long run to just invest in own SIM and take Safaricom head-on.
What John Walubengo thinks:
Interesting views. I don't speak for Equity - and am not even a MEMBER (their customer). However, they have the following going for them.
1) they do have their OWN SIM card targeting their 8M banking customers. They can actually make money out their core group of customers using their mobile virtual network (riding on Airtel telco infrastructure i believe).
2) the thin-SIM technology is just a nice option for their 8M customers and the 20+million Safaricom customers.
3) indeed Safaricom can play dirty but I am sure they wont because (a) they can take on Equity challenge and (b) the regulator seems more ready than ever to pounce on them (recall regulator has been "looking" for them over quality issues
Remember, this looks like a mobile money battle, but the real deal is the collateral damage it is likely to cause in the voice market because once a Safaricom customer mounts the thin SIM Card and discovers that they can make cheaper calls/sms with it without losing their MPESA functionality...they will actually be having their cake (MPESA) while eating it (making Cheaper calls on the Equity Mobile virtual network).
Essentially, Equity is breaking a small gap into the Safaricom defensive wall (MPESA) and once in, even the data-market may eventually be free for all i.e. #checkmate.
"Don't let the fear of losing be greater than the excitement of winning."