Friday 25 March 2011

Mobile Phone Tariff Wars and Benefits to the 'common' Mwananchi

Talk by the ministry of Information and communication in relation to the mobile phone price wars point towards setting up a minimum charge to stabilise the prices charged by competing companies.
The main argument by the stake holders (read Safaricom) is that low prices are detrimental to the economy with resulting job cuts and lowering of profits and tax contributions to the ex-chequer.
Now lets go down to the mtaani aspect. Kenya has a population of 50% living below the poverty line i.e below 80Kshs a day 
https://www.cia.gov/library/publications/the-world-factbook/fields/2046.html
as at 11th March 2010.
In line with vision 2030, we want to achieve universal access to telecommunication services by this time, and what better way to do this by lowering rates to those affordable to more than 50% of the economy, those living below the poverty line?
The number of support staff in any service oriented setting is usually directly proportional to the number of subscribers; in the telecommunication sector, this applies to customer care, technical, sales and management. I may not be very well conversant with most of the big company's operations, so somebody tell me how a firm with 12 million subscribers will retrench staff and still have the capacity to handle the said number of clients.
The benefits to the citizens of the lower classes are so many to innumerate but I will just mention a few.
-Lower calling rates means freedom to do more transactions at minimal cost.
-Lower calling rates means lower cost of calling vouchers(scratch cards) with introduction of 5/= vouchers.    When Airtel lowered their calling rates some people were actually surprised to receive calls from people who  were known to never call.
The mobile tariff wars may cost Kenya $61 million in tax revenue, says the govt of Kenya, but I am sure the tax revenue will increase in tremendous magnitude since you have given 20 million more people the power to use mobile phone services. What they are actually not telling us is that a 'certain' company will lose millions in revenue, and that revenue will just be transferred to a different company by the Kenyan public who are tired of being fleeced of their hard earned income by a few companies with the protection of the government.
It is time the middle class joined the poorer classes to fight for sustainable economic conditions. This is because when the going gets tough for the lower classes, it is the struggling middle class who will suffer the repercussions.
Please write me a comment on your views,
Steve.

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