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.



  1. my attachment to safcom goes beyond cheap calls. besides needing my old 722 number, i also use m-pesa and gprs (internet browsing) which matter (to me) as much.

  2. I had to abandon safcon because of the very poor network availability where I am and very convenient corporate arrangement at work. I still keep a safcom line around for Mpesa which I consider the best money transfer service in the market.
    @ bankelele I am a bit surprised that you survive on safaricom GPRS my experience is that it is highly erratic and when connected is prone to breaking the link on this score celtel is vastly superior

  3. Am keeping my safcom number. My logic is, all my family members and my friends are on Safcom, if i switch, i'll not get to enjoy the said tariff and since calls between the two are too high, they will NEVER call me. It might be an uphill task convincing all to change so we enjoy the cheaper rates...

  4. I already made the move to celtel. Its cheaper and by the way Bankele, it has superior GPRS and when in any trouble, the customer care line works. The last I checked, most of my friends have celtel permanently on.

    Safaricom made a dumb move to stay put and will regret soon. Just ask air time vendors whether the celtel purchases have gone up and they will give you an affirmative yes.

  5. you got it so well on brands. have you ever noticed that if you went to a bar and asked for beer they give u tusker without asking? the same way you go to a newspaper vendor and ask for one they quickly give you 'nation', its actually the same thing with airtime. you go to a shop and ask for airtime, they give you safaricom airtime without asking which one you wanted! You may talk about loyalty but i think some guys just do their branding better than others. If you look at safaricom adverts, they make you feel and think that they are alomost the same thing as the country called Kenya!

    In fact during the clashes some people resorted to call Safaricom for help just the way they would have called the police.

  6. I've had a celtel line since the days of kencel (0733) and their 15 bob flat rate tariff. back then when Safaricom was making all the right moves to give their customers cheaper rate, kencel was snoozing and lost many subscribers. personally I've had several Safaricom line on the side but always loose them due to high maintenance cost. Its obvious then that if Safaricom continue 'snubbing' the cheap rates celtel is giving out then history is bound to repeat. already most of my family members and friends who made the switch to Safaricom are acquiring celtel lines on a temporary basis...but soon they will discover that celtel is cheaper and make the BIG SWITCH. Forget Loyalty...its just an illusion.

  7. Two words to watch out for in this war...NUMBER PORTABILITY.

  8. Kirima and lifession: I only browse on my phone, not PC. and contiuning on the data thread, if celtel had 1/= SMS, I'd jump in a minute
    m-pesa is a game changer and, the only pitfall I see is if Vodafone and Safcom disagree of their licensing arrangment.

  9. The deal is thus: my 1st line was Kencell and they punished me and flogged me with those whips that albino guy for 'The Da Vinci Code' used, for my choice. What? you ask. Think back to a time when Kencell only had a 300/= card for air time from which they automatically took 60/= when you loaded. As though that weren't bad enough, they had per minute billing at rates of like 50/= per minute meaning your card couldn't last anyway.

    All that I could take. The proverbial straw was when they set up and heavily publicised a promotion that was about as real as those pink elephants doing pirrouets outside my window! It was something to do with getting free credit if you topped up X amount Y number of times. They made their killing from this, left, and Celtel took over.

    So I know that the Celtel coverage is great and clear and they don't have the Friday evening nonsense we get and the 3/= deal and all that and all that but it would take the parting of the red sea for me to trust them again.

    I'm waiting for econet!

  10. I stick with safaricom because it has mpesa and 3G internet access.

    Could not care less about the cost of phone calls since i seldom make any.