A Golden Opportunity for Telkom to gain market share.

I have observed with interest the new push and ambition by Telkom in the market, so here are thoughts that may help them out

 

I am a software developer with the ambition of placing technology in the hands of ordinary Kenyans. A friend approached the other day. He is running a quarry and needs software to manage his inventory, sales and stock movement.

 

We went over several options, which excited him, but I believe in customer success, and I don’t give options just to make money, they have to be options that can work for him.

 

The most plausible option was a web application that could be accessed remotely through some form of connection. Being a remote area, we ruled out an android app due to the cost of developing, and challenges with connectivity. The price of data would also be prohibitive (and of course you can not trust Kenyans to use the data you buy them for strictly work engagements). Connectivity also made the option of a mobile friendly web app undesirable.

 

Having worked with ussd and seen how flexible and cheap it can be to implement, I created a prototype for him. We would have 4 menus – production, sales, gate pass, and expenses for a start. Production team would update the stock, sales team would input every sale, and at gate pass, the gatekeeper would query the content of each Lorry leaving the quarry on ussd to confirm the items, quantities and payment. All this data would be stored in the cloud and the quarry owner who has good Internet connection would access the data from his laptop.

 

Now a shared USSD code (for example *111*111#) would cost Kes 70,000 per year (6000 monthly) and crowd infrastructure on Amazon web services would cost him Kes 12 000 a year (Kes 1000 per month for decent computing power for his needs). This would cost him Kes 80,000 in the least. For a small business this is a lot.

 

This is where I challenge Telkom (or any other telco that wishes to unseat safaricom to pay attention). You could easily create a ussd platform that offers shared ussd codes (The way Africa is talking does). Charge each shared code Kes 500 per month (One dedicated code yields 999 shared codes, so one dedicated code gives you half a million shilling per month – so there is still money to be made there). This brings down the cost of my small business owner from Kes 80,000 to Kes 18, 000 per year. Which is very affordable.

 

Here is the beauty; Telkom will have sold at least 10 new lines to this small quarry business. With each ussd session, they can make 2 shillings. They can now start upselling voice and data to these new customers. If the service is good, they will slowly adopt Telkom as their second or even first telcom service provider.

 

I said Telkom will have sold 10 new lines. Nay, I as a developer, I will have sold for Telkom 10 new lines. What Telkom needs to do then is approach the developer community. Offer them shared codes at the same price (Kes 500 per month) for their software development work. If you get 1000 developers, those are 1000 new lines sold. Developers are heavy data consumers – talk about low-lying fruits.

 

When any developer creates an app using Telkom ussd code, they will have to sell new lines on behalf of Telkom. This will have the effect of creating small pockets of Telkom users. Imagine we have an app for mama mbogas (and I am creating one to be sure), small retailers, boda bodas, matatus, farmers, pastoralists – the list is endless. You can see the small pockets of Telkom users multiplying and merging. And now, users who were only interested in using ussd start using voice and data, and Tkash, and before we know it Telkom is quickly gaining market share.

 

The areas of data and voice no longer give competitive advantage to telcos. To gain market share, there is no better way than to create an app ecosystem that gives customers value and a reason to get that Telkom sim card.

 

I will be excited to be the first developer to start this revolution.

 

 

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