Wednesday, May 21, 2008


If there is an interesting oligopoly (duopoly) in Kenya is Safaricom  and Celtel. While other oligopolies say Newspapers have a fixed price for their products and that's the expected business behaviour Safcom/Celtel continues to wage price wars.

The latest is one of the cheapest; 3/= sh Celtel off peak hours. But is anyone switching to Celtel. Kenyans have been waiting endless for cheap mobile calls, nothing is cheaper than 3/= but why are Safaricom subscribers so loyal. There is nothing superior about Safaricom, their customer service is the crappest, their free customer care line never goes through, their care centres always have lines akin to those of Co-operative banking hall.

Things Celtel/new entrants might have to consider;
Kenyans hold their numbers dear to their heart. At the beginning of the mobile telephony, subscribers switched their lines between Kencel and Safcom before finally settling on safaricom or Kencell. That's at the point Kencell then lost their first war.
Kencell fought the battle at Clarity; Safaricom fought the war on cheapest.
Cheapest made sense then.

So came Celtel which realized that clarity was not making sense and started introducing new cheaper tariffs on a weekly basis. Some people bought Celtel lines on the side to call when it was cheaper to do so. Again no one switched from Safaricom permanently. It soon became boring to  switch between two lines.

Now Celtel is fighting on a cheaper war, Safaricom is not bothered.

Will Safaricom regret this apathy? Safaricom must have tested their customers loyalty and realized its unwavering. 

Kenyans have this thing of brand loyalty. As someone joked they ask for "Blueband ya Prestige" They think margarine is blue band. Just like they think Pampers =diapers or think Kodak.

Think Mobile think Safaricom.