Price controls in telecoms will kill innovation

Airtel staff attend to customers: Any controls interfere with the desire to shine. FILE PHOTO | NMG 

By MBUGUA NJIHIA

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Summary

• Initiating any sort of controls that are not cognisant of the time, effort and sheer bankrolling of these strategies, hurts innovation as everyone falls back on the crutch that is a negative lobbying position waiting for that all-important handout hived from the backs of those who dared try.

About eight years ago, heated price wars were the bane of the mobile telecommunications industry with all three players then, actively engaged in some form of posturing.
The recent announcement that the Communications Authority of Kenya is considering introducing price regulation worried me.

History and future thinking must have us look at the present predicament, if at all it is one, from a different lens.

The market has favoured all players differently in the past. Some had a first mover advantage, others had a solid infrastructure plus asset base while others had access to deep pockets courtesy of a global pedigree.

We win some and lose some in the open market and must be willing to own those mistakes and not offload the outcomes of boardroom sessions on others.

We need to let go of this ‘kiosk’ mentality where we seem to regurgitate what peers have put out. Homogeneous product offerings only result in a fight for wallet share where the one with the deeper pockets or cheapest access to the consumer takes the day.

READ: Call tariffs rise looms in planned price controls

Telcos have learnt to open space for co-operation, having learnt dearly when they made mistakes. There is such a thing as competition. The bottom-line and ROI matrix last I checked is not sensitive to the process of its actualisation. No one has a strangle hold on the end consumer, not yet at least.

There are verticals that remain untouched that could have a higher average return per user that may fall outside the core business range of the traditional telco but we know for a fact that those lines have since blurred and we need to see more movement toward that direction.

Profit and market share is a reward reaped by businesses and corporations who navigate risk and market dynamics well, often underpinned by innovation and solid execution of well thought out strategies.

Initiating any sort of controls that are not cognisant of the time, effort and sheer bankrolling of these strategies, hurts innovation as everyone falls back on the crutch that is a negative lobbying position waiting for that all-important handout hived from the backs of those who dared try.