Lower calling rates will surely send Kenya’s ailing economy into a coma
If just about anybody were to speak on the telephone for a shilling a minute, as has been decided by Bharti Airtel, Kenya would become the biggest chattering country outside a monkey house.
Cheap calls are bad for people. Besides wasting time that could be spent walking the two kilometres to see if the headmaster has arrived for the school meeting, or checking if there are enough vegetable customers at the market, speaking on the mobile phone at leisure has absolutely no class.
People would suddenly have money they should not. Then they would start drifting off towards their usual bad habits like binge eating, alcohol abuse and shopping addiction, among other non-essential activities.
And the government would have to shoulder their health costs without even collecting sufficient tax. Since the government taxes profits alone, firms that only break even or make losses would frustrate efforts to raise revenue for implementing the Constitution and stemming the effects of drought.
That is why, for years, Kenyans have been happy to pay the leading mobile phone operators what they asked as a way to avoid the temptation to spend on other items and thus help their government to bring development closer to the people.
Already, the price cuts in calling rates have seen the Kenya Revenue Authority miss its target for the quarter by Sh5 billion, almost the same amount as the Sh5.8 billion it collected from leading mobile provider Safaricom for the whole of last year.
In less than three months, the freeloaders in Kenya who love cheap things have switched to Airtel, denying the government dividends and tax revenue. More could troop there with the Sh1 a minute offer within the network.
Cutting calling prices has no effect on the market, as Safaricom’s chief executive said a few months ago. It must not distract good businesses from using the customer to generate profits, which are used to pay shareholders their dividends.
The Kenyan Government, which owns 35 per cent of Safaricom, made Sh2.8 billion in dividends last year. If this money were to reduce because people are not being charged appropriately, there would be hell to pay.
Companies that refuse to make money off voice calls and instead seek to sell a range of services and create relationships live in a bad country called Utopia. In such places, they even offer free calls.
This is what Airtel is trying to do in Kenya — turn this republic into a cheap unrealistic country where things are free.
Companies are formed solely to make profit in the shortest time possible. Those that sink money into Kenya and wait long periods to reap the gains are only using the country as a testing ground for cynical economic experiments.
Their irresponsible behaviour can force honest businesses that pursue profit through the quickest route and reward their shareholders to cut costs. They would no longer have the largesse to edge out the beer manufacturers from television and newspaper advertising.
They would no longer be hiring 1,300 graduate customer care representatives at Sh40,000 a month. Although business process outsourcing – doing jobs more cheaply than they could be done in another country – will be one of Kenya’s strengths, we are not in the future yet.
You would call a mobile phone number, out of nostalgia, hoping for that Maasai glottal, the Luyia accent, the Kalenjin monosyllabic and instead be assaulted by a flat, disembowelled Egyptian or Indian voice because the job has been outsourced. Kenyans, being expensive people, cannot sink that low for a phone call. What would they have to put up with next?
And worse could follow. Some of the mobile phone operators would close, leading to massive unemployment – of up to 3,000 people for Safaricom. There would be a graduate at every closed shop corner the following evening, waiting to mug you.
Things are not as polite as they used to be when Telkom laid off 15,000 people to pay debts ahead of its sale to France Telecom in 2007.
The core business of Safaricom is to grow the economy. It does this by generating taxes, then looking for graduates to employ.
Hearing the chink of the shilling in the till, Safaricom’s bosses can then be inspired to invest in new technology. No one else would if the Kenyan market did not meet them on their terms. Unless they receive help in their mission, the firm could abandon Kenya to the backwaters of technology.
Cheapskates who want to enjoy top-of-the-range services are only keen on sending the economy into a coma. That is why Safaricom’s bosses would rather die than reduce the cost of calling to Sh1 a minute.
