CELTEL MISFIRE AND SAFARICOM’S BULLSEYE

It was a lovely day for Michael Joseph as he announced the company’s result for the year 2007. With a pre-tax profit of 19.9 billion shillings or $321 million casscading to profit after tax of 13.9 billion or $223.7 million. Not a pretty bad day MJ.

And as Joseph went on the guys at waiyaki way have a market share of 84% … what 84% percent. how in the world does that happen get 84%.

Lets do the math. Safaricom which has been around for a over 7 years has a subscriber base of 9.1 million. A year ago the subscriber base was at 7.5 million with celtel having just over 2 million. Taking the que from their growth it would be assumed that celtel may have slightly over 3.5 and telkom wireless with over 200,000 so just under 13 million mobile users. (CCK or the Communication Commission of Kenya has figures for 2006) figures why they could not make a decision if telkom wireless was mobile telephony or not .

Anyway Safaricom should be happy. The bottom line was reached and I must say very impressive. However the silver lining may be waning. First the Average Revenue Per User (ARPU) is dipping. From kenya shillings 799 million to 616. The company says that this has been caused by their move towards the rural areas where the low tarrifs package is selling well.

However if there is something that has always propelled safaricom is the wave of change mobile behaviour. On the onset may kenyans have been tech-stylists but as more and more applications are added into mobile telephony (or the convergence of technologies) the seasoned users of mobile phones are maturing into technology leaders or tech-leaders.

With a sizable chunk made in data and texting the business development desk at Safcom House may be on a gold mine here. Many more people are spending time surfing, texting and doing other data features on their phones and with the launch of 3G and a good sales pitch, MJ will be announcing another great perfomance come next year.

As for celtel what could be going right there.mmmm nothing, well its still clear and am told they have something close to M-Pesa. It does the same as M-Pesa and relatively quite easy to use. I have not used it since you can not locate it so hard to use it. And for a nice name like Sokotele (plenty in the market) it just sucks. Its likely to become as the phone booths. good idea just the wrong wrong approach.

Thinking about celtel gives you a head ache. such a great brand just lousy sales and appreciation of our peculiar calling habits.

I wonder what will happen when orange and econect roll out. May be what they have learnt over the years is being good at playing catch up.

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On monday at about 2pm kenyan time, the corporate communications director of Celtel Kenya Mr. Okwiri while admiting that Celtel had been associated with the up market clientle; decided to reduce it call charges within the network (not across networks) to three bob. Not that bad considering that Safaricom’s cheapest rate is still at 8 bob.

Is Safaricom likely to reduce their rates? Well I predict sooner than they would hope. There are two initial reasons why. One – is Telkom Wireless which will soon if the owners think otherwise change its name to Orange. Now if what happen to ODM is any thing to go by then expect a huge rush to this network. Actually if I were the head of marketing than by all means this will be selling candy to children. Or may be I should apply for this position since I have a clue on the peculiar calling habits of kenyans.
Then there is Econect which seems to have a tire-up with SR of india. Now if I were in parkside or safaricom then I should begin to do a bit of math and not expect the colossal profit that can fund Kigali’s budget.

Just to cut this verbal diarrhoea come the end of the year kenyans should expect to pay about 2 bob for any calls made on mobile phones. How sure am I? Very sure

Of course there are certain things that the new network providers may not introduce since Kenyans are quite frugal when it comes to buying phones and devices. (this remind me of a lady who used to put a new device in water to check on its durability. you ofcourse know how many phones she had to go through – she may still be looking for it). Pay as you go may work out or not; but you could always SMS Michael Joseph of Safaricom and ask him if he had predicted 7 million customers.

Well kenyans just you wait…. prices will definately come down way down and even that free weekend call plan that other networks have in the west will be here or hear can you hear me.

Just make sure that your battery life is good and the phone is tip top. Yoour certainly won’t like it when the phone goes dead while you were getting instructions on how to change the baby’s nappy.

… and did I mention about the fibre optical cable….