alexa Fix the mobile phone market and quality will take care of itself - Daily Nation

Fix the mobile phone market and quality will take care of itself

Monday January 13 2014

John Walubengo

John Walubengo 

JOHN WALUBENGO
By JOHN WALUBENGO
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A recently published Quality of Service report by the regulator CCK, shows that all the mobile service provider failed to meet their Quality of Service (QoS) requirements. This essentially means that the four mobile operators, namely Safaricom, Telkom Orange, Airtel and Essar are all offering sub-standard services to their customers.

Repeating what the Director General of CCK had earlier indicated, the Cabinet Secretary for ICT, Dr. Fred Matiang'i emphasized that the operators must improve on their quality of service or risk the renewal of their licenses.

In a previous article, I argued that threats of revoking a license from a Telcom operator were not sufficient to make them improve their quality of service.

Safaricom, the leading mobile operator controls over 75 per cent of the market in each of the voice, data and the mobile money segments. Furthermore, Safaricom knows that as the largest corporation in Kenya by revenues, it is the biggest contributor to the exchequer which, bluntly speaking, means the government needs them up and running as opposed to down and under.

Agreeably, most subscribers are experiencing unnecessary downtimes, dropped calls, congestion and other ills associated with poor quality of services. But what are the real options available for the regulator in dealing with quality issues in such a telecoms market?

There is only one option - which is to stop pretending that there is competition in the sector. If there was true and practical competition, customers would vote with their feet by moving away from the offending operator to the other operators perceived to be offering better quality services.

On seeing the exodus of customers, the offending operator would naturally endeavor to win back the customers by improving the quality of their services. This creates a "virtuous" cycle of competition based on quality rather than the ongoing "vicious" cycle based solely on pricing.

Indeed the quality report indicates that a few years ago most of the operators did try to compete on quality but eventually realized that this was not working due to the market failure situation. All of them therefore decided to drop or ignore quality issues which have since continued to deteriorate over time.

CCK should therefore investigate and address the failure of customers to move to the operators offering better quality service. If this market failure is resolved, it will kick the market back into the virtuous cycle of competition since operators will reap the benefits of better quality services.

Regular measurement of the quality indicators on the part of the regulator is good, but cannot by itself improve the quality situation. Threats and tougher penalties may address the the symptoms and provide temporary relief but will in the long run fail to address the root cause of the quality problem. 

Twitter : @jwalu

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