Mobile Wars Celebrations Premature

Zain lowered its calling costs to 3/- pm and sms at 1/-. This came after CCK the industry regulator lowered the interconnection rates to 2.21 and 0.1 for calls and sms respectively.

A lot has been said on this topic but my point of interest is different.

Caroline Mutoko in her article on Monday said clearly after quoting Micheal Joseph Safaricon CEO, that for the Telcos to make the same cash they were making before Zain muddied the waters, it will require 65% increase of calls from the customers. This is definitely not going to happen. In fact, looking back, Zain is bound to suffer more for that for the simple reason that 80% of their calls terminate at Safaricom. So, while Zain will be haemorrhaging cash, Safaricom will be gaining from Zain. How uncanny.

For these companies to make cash, innovation is the way out. MPesa is doing great changing lives and there is no doubt about that. Its now available in UK ans South Africa. ZAP meanwhile, is struggling, for the simple reason that they can't facilitate sending cash to other network numbers unlike Safaricom.

Next year Safaricom is unleashing the 4G, quite a feat considering that they have locked the data market through their modems which are now the data entry point for new PC users if not cellphones.

This is the trend that Zain ought to follow but thinking that they will transform the Kenyan market Indian way, that will be a very tall order their tactics are usually short lived.

For now, Safaricom is mulling the next step after Zain muddied the voice prices leading to a loss of 2% traffic. The effects of this will not be immediate, rather they will be visible in due course and this may lead to a closure of two companies to leave the market to two well established Telcos.

If this happens, Safaricom and Orange have the best opportunities to survive, but only of they are focused on reengineering their products and innovating new services for their target clientèle.