Baraka Muli is a Nairobi-based communications consultant. By Barrack Muli
Interoperability is starting to creep into Kenyan financial circles thanks to our world-beating exploits in mobile money and financial inclusion.
ALSO READ: Telkom rewards subscribers with 50 cars Interoperability is the ability of a computer system to run application programmes from different vendors, and to interact with other computers across local or wide-area networks regardless of their physical architecture and operating systems.
While this is already happening among players in the banking industry, it has just started being piloted by telecommunication firms, where mobile money customers will be able to send and receive money across different networks. Wallet-to-wallet interoperability growth has been phenomenal and an excellent example is how bank ATMs speak to each other across banks, countries and even currencies.
As fintech goes, telecommunication companies are fast migrating into the conversation that banks have been having since they started going branchless and then connecting with rivals to offer services such as Point of Sale Service and ATMs. The local mobile payments ecosystem is quite diverse.
It has players and solution providers across the board. It’s wider than telcos as it also features solution providers, such as Interswitch, Cellulant, Integrated Payments Solutions Limited, and others. Indeed innovation is the only differentiator.
As it goes, interoperability always needs a mediator or clearing house. It is a critical component to avoid having a single operator bearing all the risk. Concerns are addressed Interoperability has been driven by innovation and as often happens, innovators find themselves way ahead of regulators.
But it makes good sense that policy and regulation should never penalise innovative market leaders and reward poor performers. ALSO READ: Boda boda men pocket Sh219 billion in a year The Communications Authority of Kenya – which is the core regulator for telcos – has announced that it will publish for public discourse a report on whether Safaricom is a dominant player in the telecommunications market in Kenya and what action, if any, should be taken in response to any such finding.
The publication shall then inform the final release of the report by ensuring that stakeholder concerns are addressed. As CA prepares for publication, I wish to state a few home truths since, in any event, the outcomes will affect most of Kenya’s 40 million mobile phone subscribers.
It has been argued elsewhere that interoperability will foster competition. I beg to proffer that this position is unfounded. Interoperability in the banking sector has never been the defining factor for competition. It is the business models, marketing strategies, partnerships, innovation, product differentiation, customer service, depth of value added services and above all, trust, that define brands and the respective bottom lines. One of the key references to the study on the telcos industry in Kenya is structural barriers to entry. It is hollow if one were to track the competition between the main players and how we got here, all of which lies in plain sight.
The acquisition of licences, the tax regime, regulatory environment, media landscape and other business environment factors have all been equitable and accessible down through the years that cell phone companies have been battling for our hearts and minds; for our trust.
To have the social licence to operate and build a client base, nurture trustworthiness is an attribute that takes years of excellence, service and innovation. So critical is this element that 84 per cent of bank executives agree that trust is the cornerstone of the digital economy according to a recent report by globally acclaimed management consulting and professional services company Accenture PLC.
ALSO READ: Safaricom officials ordered to appear in court over Garissa University terror case
Penalising market leaders by requiring them to stop and wait for perennial underperformers to catch up would be a gigantic injustice not only to the market but to the millions of customers they serve. Wonderful innovations It should be avoided at all costs for it would endanger the quality and assurance of world-class services and a track record that will take generations to match, much less surpass.
Market leadership attained through the right strategies at the right time should never be viewed as inordinate dominance. Competition does not mean that all contenders end at the same place. Irrespective of identical environments, no two trees in the same forest are of identical height and build.
A move against this natural wisdom may be akin to an attempt to manicure a forest. I was happy to learn that telcos are now entering commercial arrangements to interoperate their mobile money platforms. They are already demonstrating that the industry does not necessarily need regulation at every turn.
I’m inclined to posit that our telcos should even be looking to regional and international markets as their field and this is where CA should be driving the conversation about our wonderful innovations like mobile money and mobile banking.
Whatsapp is already piloting mobile money in India and other big players like Facebook, Google, Amazon and Alibaba are already in the Kenyan space. I suppose that’s who we should be looking at as competition or potential competition for our telcos and not get preoccupied looking inward.
Market leadership is not at all a bad thing. But just which market are we looking at? Can our village champion win at the inter-village championships and climb to beat global competition? Let us develop Kenya’s market leaders into global trailblazers. We host the Silicon Savannah and we can do it.
Kenya is on the cusp of
building world-beating firms; we can’t stop now
By Barrack Muli | Published Sun, February 18th 2018 at 00:00, Updated
February 17th 2018 at 23:32 GMT +3
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Baraka Muli is a Nairobi-based communications consultant
Interoperability is starting to creep into Kenyan financial circles
thanks to our world-beating exploits in mobile money and financial
inclusion.
ALSO READ: Telkom rewards subscribers with 50 cars
Interoperability is the ability of a computer system to run application
programmes from different vendors, and to interact with other computers
across local or wide-area networks regardless of their physical
architecture and operating systems.
While this is already happening among players in the banking industry,
it has just started being piloted by telecommunication firms, where
mobile money customers will be able to send and receive money across
different networks.
Wallet-to-wallet interoperability growth has been phenomenal and an
excellent example is how bank ATMs speak to each other across banks,
countries and even currencies.
As fintech goes, telecommunication companies are fast migrating into the
conversation that banks have been having since they started going
branchless and then connecting with rivals to offer services such as
Point of Sale Service and ATMs.
The local mobile payments ecosystem is quite diverse. It has players and
solution providers across the board. It’s wider than telcos as it also
features solution providers, such as Interswitch, Cellulant, Integrated
Payments Solutions Limited, and others. Indeed innovation is the only
differentiator.
As it goes, interoperability always needs a mediator or clearing house.
It is a critical component to avoid having a single operator bearing all
the risk.
Concerns are addressed
Interoperability has been driven by innovation and as often happens,
innovators find themselves way ahead of regulators. But it makes good
sense that policy and regulation should never penalise innovative market
leaders and reward poor performers.
ALSO READ: Boda boda men pocket Sh219 billion in a year
The Communications Authority of Kenya – which is the core regulator for
telcos – has announced that it will publish for public discourse a
report on whether Safaricom is a dominant player in the
telecommunications market in Kenya and what action, if any, should be
taken in response to any such finding.
The publication shall then inform the final release of the report by
ensuring that stakeholder concerns are addressed. As CA prepares for
publication, I wish to state a few home truths since, in any event, the
outcomes will affect most of Kenya’s 40 million mobile phone
subscribers.
It has been argued elsewhere that interoperability will foster
competition. I beg to proffer that this position is unfounded.
Interoperability in the banking sector has never been the defining
factor for competition. It is the business models, marketing strategies,
partnerships, innovation, product differentiation, customer service,
depth of value added services and above all, trust, that define brands
and the respective bottom lines.
One of the key references to the study on the telcos industry in Kenya
is structural barriers to entry. It is hollow if one were to track the
competition between the main players and how we got here, all of which
lies in plain sight.
The acquisition of licences, the tax regime, regulatory environment,
media landscape and other business environment factors have all been
equitable and accessible down through the years that cell phone
companies have been battling for our hearts and minds; for our trust.
To have the social licence to operate and build a client base, nurture
trustworthiness is an attribute that takes years of excellence, service
and innovation.
So critical is this element that 84 per cent of bank executives agree
that trust is the cornerstone of the digital economy according to a
recent report by globally acclaimed management consulting and
professional services company Accenture PLC.
ALSO READ: Safaricom officials ordered to appear in court over Garissa
University terror case
Penalising market leaders by requiring them to stop and wait for
perennial underperformers to catch up would be a gigantic injustice not
only to the market but to the millions of customers they serve.
Wonderful innovations
It should be avoided at all costs for it would endanger the quality and
assurance of world-class services and a track record that will take
generations to match, much less surpass.
Market leadership attained through the right strategies at the right
time should never be viewed as inordinate dominance. Competition does
not mean that all contenders end at the same place. Irrespective of
identical environments, no two trees in the same forest are of identical
height and build. A move against this natural wisdom may be akin to an
attempt to manicure a forest.
I was happy to learn that telcos are now entering commercial
arrangements to interoperate their mobile money platforms. They are
already demonstrating that the industry does not necessarily need
regulation at every turn.
I’m inclined to posit that our telcos should even be looking to regional
and international markets as their field and this is where CA should be
driving the conversation about our wonderful innovations like mobile
money and mobile banking.
Whatsapp is already piloting mobile money in India and other big players
like Facebook, Google, Amazon and Alibaba are already in the Kenyan
space. I suppose that’s who we should be looking at as competition or
potential competition for our telcos and not get preoccupied looking
inward.
Market leadership is not at all a bad thing. But just which market are
we looking at? Can our village champion win at the inter-village
championships and climb to beat global competition?
Let us develop Kenya’s market leaders into global trailblazers. We host
the Silicon Savannah and we can do it.
Read more at: https://www.standardmedia.co.ke/business/article/2001270129/kenya-is-on-the-cusp-of-building-world-beating-firms-we-can-t-stop-now
Read more at: https://www.standardmedia.co.ke/business/article/2001270129/kenya-is-on-the-cusp-of-building-world-beating-firms-we-can-t-stop-now
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