FUD means Fear, Uncertainty and Doubt.
Safaricom’s new CEO, Bob Collymore was on the news the other day furious at Airtel for their new price cuts. His main point was that these prices were not sustainable and may lead to the collapse of the mobile phone industry in Kenya. Mr. Collymore went as far as saying that the government would lose revenue because Safaricom would not make as much of a profit as in recent years.
A day later, Dr. Ndemo (the permanent secretary) was reported by the Daily Nation saying that the mobile phone price wars may even lead to the failure of the implementation of the new constitution in Kenya. The talk in town now is that the government may place a lower limit on mobile call rates i.e. akina Airtel will not be able to offer cheaper rates to us any more.
Okay….what the hell is going on here? Kenyans have been looking forward to cheaper call rates for years yet when they finally come the government wants to stop them?
It is true that the government will lose huge amounts of revenue from Safaricom’s reduced profits but is it really right or fair to change the rules so that Safaricom’s high profits are maintained at the expense of its competitors?
Such a move by the government would be VERY wrong and would set a very bad precedent in Kenya. This is why:
- Airtel is a business that has chosen a certain strategy to tackle the Kenyan market. They have chosen to incur losses now so that they can profit later. This is also called “making an investment”. It is not proper for the government to stop them from doing so.
- Any change of rules would serve to protect Safaricom from the competition. This is unfair at the very least. Every business should be responsible for its own survival.
- The money that we the consumers save by paying less on calls does not suddenly disappear into thin air – we will still use it within Kenyan borders and the government WILL earn tax revenues on almost everything else that we spend that money on.
- Cheaper communication costs very often (in other countries) lead to a more robust economy.
Let’s hope that the government does the right thing.
