Kenya’s New Mobile Networks:The case for MVNOs

The buzz over the past few weeks in the telco sector has been the news that we will now have three new networks operating in the mobile scene offering voice, data and Value Added Services riding on existing infrastructure.

Competition is always welcome in any industry and cant wait to sample their services. It is interesting that two of the 3 new entrants have a financial background showing that the M-Pesa hype has hit home with players salivating after it. One is Equity Bank Group through a proxy, Finserve Africa Ltd. The other license holder is Mobile Pay Ltd who operate Tangaza Pesa, a money transfer service. Mode comes in third dealing in Value added services for the mobile sector.

All of these networks apparently will run on Airtel Kenya’s unused capacity which makes me wonder exactly how much of their spectrum sits idly while people complain of congestion on Safaricom. Orange have been whining that CCK denied them the license to offer the MVNOs its spectrum. Quite frankly I would have refused too seeing as they seem hell bent on sitting on resources.

James Mwangi, Chief Executive Officer and Mana...
James Mwangi, Chief Executive Officer and Managing Director, Equity Bank, Kenya, panelist, “Igniting Innovation in Financial Access: Public & Private Approaches for Greater Access by 2020” (Photo credit: World Bank Photo Collection)

From a financial and business viewpoint, this is a sweet deal for Airtel. Have your expensive spectrum utilized, get some money in the bank. For the likes of Finserve Africa, Mode and Mobile Pay things couldn’t look rosier. They are having entry to an already ripe market (some would argue already plateauing) for peanuts as compared to the likes of Safaricom and the fights, struggles that Yu had to go through to start operating.

Setting up Base stations, cabling, software, human resources, license fees and all sorts of other costs leaves mobile operations to the big boys with deep pockets. The new entrants will have to spend especially in marketing but no worries about hardware land issues and spectrum drama. One institution to watch is Finserve Africa simply because it has access to deep pockets with a grudge. A short walk down memory lane will have us see that the much hyped M-Shwari used to be called M-Kesho when the account used to sit with Equity Bank. I know not why they fell out but the resultant loss of footing in the mobile money landscape is something Equity will definitely want to resolve asap.

And now for some free advice from me to Equity Bank. This is a game of attrition. A case of replacing the incumbent. In this regard you want to do precisely the opposite of what they are doing. When it comes to the primary interface with the customer, the phone is king. This is where you want your SIM card to be an option. Do not sell or promote single SIM devices at any cost. Exclusively flog dual SIM or triple SIM devices if and when the show up. The idea is to find space next to Safaricom in users lives. Do not seek to replace because you will fail miserably like Orange, Airtel and Yu. Once you sit next to Safaricom, Make everything cheaper and extremely tightly integrated with Equity bank accounts. All Equity customers are likely to get a SIM card just to see what this new fangled thing is from their favourite bank.

Now to slowly convert followers, offer everything cheaper than Safaricom. Whether its Data, SMS, Money Transfer etc. Then be more flexible than Safaricom in terms of modifying the product to fit your customers. Also being a bank, finally sort out this international payments thing with the CBK to make Paypal and related transactions seamless. Be the defacto payment method for online commerce tied to the mobile phone and you will have all the techies singing your name.

Attack Safaricom on fronts tat they would rather not fight in like opening the mobile money API to the internet for e-commerce.

This remains to be an eventful year and I cant wait to find a way to jump into it.

 

 

Enhanced by Zemanta

Airtel Kenya

I don’t understand some companies.

I imagine that the primary motivation for a commercial company is profit. For a mass market company that profit lies with the consumers. Keeping our consumers happy is thus a reasonable way of getting more money = happy shareholders. Keeping them infuriated is not a good plan.

Back when they were still Celtel or Zain, I got myself a postpaid line since I ad an online gig that needed near constant internet. Back then accessing net was either at a cyber(expensive and movement restricting) or getting a mobile connection(still expensive and slow but doable)

I used to pay what I pay now for my Zuku connection so I expected proper services. It was fine technically for the most part considering the times and the options available.  At some point they decided to ‘revamp’ the postpaid offering. The resulting interaction led to my breaking of he contract.

The deal we had was this. I pay 4,000/- a month and get unlimited internet and 1000/- for voice /SMS usage. Pretty ok and I had no desire to leave this arrangement. The new plan was more or less the same but voice was cheaper so of course I signed on. Once the new postpaid plan was launched they decided that I no longer needed unlimited internet and started billing per MB. All without as much as sending an SMS or email about it. Come the end of the month I am presented with a bill for 45,000/- bob. The ensuing correspondence between us was basically threats about me signing a contract and needing to pay and nonsense about my phone being off when they tried to reach me.

 I just threw away the line and let them keep the deposit.

Recently I came upon Airtel airtime vouchers that was unused for a past project. The vouchers had since expired and thus unusable.

I have had similar predicaments with both Orange and Safaricom and the matter was dealt with swiftly usually by extending the expiry of the cards and rendering them active again. As explained by @tommakau here it is not a prudent policy for telcos to extend the lifespan of  their consumable products but simply refusing to enable consumers to use legitimately purchased resources is just ridiculous.

Calls to the customer care were unfruitful, Twitter responses were the standard ‘ give us your no. and we get back to you’ (They haven’t.), visits to the Customer centers result in a blank look and my cards being slid across the table back to me. Basically the message is ‘ You shouldn’t have let them expire in the first place.’ For the most part they have no idea what to do with them. Replacing or sorting you out is seemingly not amongst their options.

I now have 3,000/- bob worth of Airtel airtime and the best I can do with it is use them as table wedges or kindling for fire.

 

 

 

Enhanced by Zemanta

Orange Kenya: Most Infuriating Sleeping Giant

So today I woke up to this from the folks over a @orange_kenya

Embedded image permalink

Which is a follow up to a full page ad from yesterday where they prove to be the cheaper option for making calls either way you slice it.

Have been an Orange customer since they started operations and I am particularly a sucker for their brand and marketing. Whoever manages this is pretty good at their job. The marketing is however miles away from the actual service that you recieve. I have for instance been complaining about the notification of the end of an unlimited internet subscription cycle. Currently at the end of the month data just starts using your airtime. An SMS a day before this happens would enable me to promptly subscribe again for the next month. But now I am left with no Airtime, no data and feeling annoyed.

Either way Orange are a giant that has been sitting in its own pee for a long time and at least I think they are now starting to think of taking on the new giant whom they allowed to grow up.

I have always advocated for the underdogs to accept their place and work with it instead of calling themselves leading anything. Safaricom is the mother and father of the telco industry as it stands. Market dual SIM phones like your life depends on it, because it does. Orange should infact be only selling Dual SIM versions of all the popular hardware. And sell them at cost. Then market your network as cheap for calls and data. Dont ask anyone to dump Safaricom because they wont. My Safaricom line has never left my side and remains my main line. I however make most of my calls and data and text from my Orange line for purely economic reasons.

Invite users to try out your ecosystem without destabilizing their routine. Cannibalize Safaricom’s market slowly and eventually profits will come.

The way out is not in price wars as Airtel has realized. Be the side chick and even though you may never manage to replace the wife, you will get most of the money. Which is the whole point anyway. Dont seek to replace Safaricoms SIM, fight for space next to it. There is a reason Safaricom never sells any Twin SIM handset. Its a mortal threat and they know it.

I thought Yu were going to go this route but they just joined the Line and are now angling for an exit.

Orang has another Troika in its arsenal but is content with leaving it as a dumb data pipe. The CDMA network that the predecessor Telkom Kenya worked so hard to build is basically now Modemland. Launch a slew of Smartphones that run on CDMA and sell them for cheap. Make data on this network cheaper than on GSM because I believe technically this is the case. Now you know that anyone who buys this handset is not going anywhere and the tech assures this.

Why they are not negotiating with AT&T for their old iphone 4 s that run on CDMA to resell locally for super cheap is puzzling. Here they have a network hat is  mostly idle that assures lock in and revenue and they do nothing to monetize it.

Meanwhile lets see how much money Safaricom makes this quarter.

 

Enhanced by Zemanta