TALK IS CHEAP.. KEEP TALKING

Conventional wisdom would have told you that, the entry of two more mobile phone companies was bound to bring a season of price wars.

This are just the calm before the storm why Econet is on its way and I do not believe that they would settle to just watching as Safaricom, Zain and Orange have field day.

So how will this play out.

 

Let’s begin with safaricom. I said and will keep to it that Safcom while it’s the most profitable company in the region can not afford to charge below 8 shillings. Oh you think buying that 1,000 shilling card says you are on a cheap tariff….well look at it this way, the more you spend talking on your safaricom the more the boys in green rake in money. On average with our peculiar calling habits you are likely to 1 minute 20 seconds on a call. That is after saying where and what you are doing and why. So take the average a bamba 20 will last the next call so you are bound to probably spend between 120 to 170. The idea is to increase the average use per person.

Therefore most guys will be paying 7 to 8 bob per minute within safaricom network.

The idea is good.

 

Orange is the trending cautiously, the 1 bob intro to the network is very nice but there for two months. The parent company has been doing well and orange Kenya will be treated as the baby. As such while results will be expected money will be pumped into the Kenyan network.

The company has earmarked about Kenya shilling 6 billion which is massive. I do expect them to maintain the 7 bob tariff within network and the 14 bob across networks. This will be their ‘get a feel of the Kenyan market’ then act. Probable change of the tariff is mid April 2009.

 

As for econet the Indian share holders are going to go crazy with their operations in Kenya. Grapevine still tells me they will have a 2 bob tariff. We will wait and see. They are going to share majority of the base stations that are currently build and build very few. This will free a lot of their money for their products. They will market hard very hard.

 

As for Zain they are flushed with oil money, so they will keep at it till they get their consumer base up. Vuka has been working in fact the joke on face book is that Michael Joseph has vukad.       

The 8 bob while is heavily being subsidised will eventually have a cross over effect sooner rather than later.

 

To all folks the adage that talk is cheap. It’s becoming a reality. Keep talking  

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