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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