YOUR CALL CANNOT BE COMPLETED: MEZA CALLS JOSEPH

The following conversation took place Wednesday night between Zain MD Rene Meza from his Blackberry and Michael Joseph from his iPhone.

IT Starts with Rene Meza writing to Joseph. Note the times...

On 18 Aug 2010, at 21:53, "Rene Meza" wrote:

Dear Michael;

I hope this email finds you well, it’s been a while.

Not sure if you’re aware of the fact that we started to experience congestion in our route to Safaricom and have escalated to your team, who came back to us mentioning the fact that they need to go through an internal approval process, which is perfectly understandable.

I’d appreciate if you could intervene in our capacity increase request as soon as possible.

Furthermore, I understand we have an overdue payment for interconnect charges with Safaricom which we plan to pay 100% tomorrow.

Thanks for your understanding and look forward to a positive response.

Kind regards,

Joseph then responded:

From: Michael Joseph
To: Rene Meza
Cc: Clare Ruto ; John Barorot
Sent: Wed Aug 18 22:00:14 2010
Subject: Re: Congestion Zain-Safaricom Route

Rene

I will check tomorrow. Did not know about this. Should not be sn issue

Regards

Michael Joseph

CEO Safaricom

Sent from my iPhone

To which Rene responded:

From: "Rene Meza"
Date: 18 August 2010 22:04:49 GMT+03:00
To: "Michael Joseph"
Cc: "Clare Ruto" , "John Barorot"
Subject: Re: Congestion Zain-Safaricom Route

Thanks Michael, really appreciate it.

Kind regards,


----------------------------------------
Rene Meza

Managing Director

Zain Kenya


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Powered by BlackBerry on Zain.

ANALYSIS AND DEVELOPMENTS UPDATE:

So as at 10 O'Clock Wednesday night, the agreement was that Safaricom CEO Michael Joseph would look into the issue Thursday morning.

When he woke up Thursday, Joseph found that Zain had issued a press release accusing Safaricom of sabotaging their new tariff.

At Safaricom House, they were furious. After steaming over the issue, the consensus that emerged was that Zain had not formally made a request for increased capacity and that if and when they did that, it would be granted under the agreed upon procedures laid out in the two companies interconnection agreement.

At this point suffice it to say that Rene Meza dropped the ball on this one. Having gotten the CEOs word he should not have sanctioned the alarmist press release crying sabotage before getting word back from Michael Joseph.

Even as the publicity war escalated, the engineers at Zain were desperately trying to get their counterparts at SafCom to resolve the issue.

Central to this are Alec Mulonga, the Network Director, Zain Kenya and John Barorot, Chief Technical Officer, Safaricom.

Clearly after the morning attack, Barorot was not taking calls from Alec, but then again, it depends on whether Alec was calling from a Zain line. Frustrated he sent Barorot this email.

From: Alec Mulonga
Sent: Thursday, August 19, 2010 10:25 AM
To: John Barorot
Subject: Request for Zain-Safaricom Interconnect Route Expansion

Dear Sir,

I tried to call but I presume you were busy.

I would like to request your support to grant approval for Zain’s request to expand the Zain-Safaricom interconnect routes. We have been in contact with Mr. Odera regarding this request and he indicated to us that he is seeking approval for the request. We appreciate his support so far at very short notice, but would like to request your intervention for possible acceleration of the necessary approvals.

In summary, the expansion request is two phased as follows:

· Phase1: to give us immediate interim relief, we propose to optimize the existing capacity by declaring more devices in the Zain -> Safaricom direction

· Phase2: for a long term plan, we are working on the ideal capacity requirements with sufficient headroom and will share with your Core Planning team in the course of today.

Looking forward to your feedback.

Regards,

Alec Mulonga,

Network Director,

Zain – Kenya.

THE STATE OF PLAY

Safaricom as of now says it is yet to receive a formal request for increased capacity from Zain. The email from the MD Zain Kenya apparently does not constitute a formal request.

Zain is not backing down though. They have embarked on building their own link which should be ready in a week's time.

The mood is bullish at Parkside Towers.

"This is just the first card we've dealt," a senior manager at Zain said. "We have four more cards to play. We are just waiting for the reaction from the market."

Reaction has been astonishing. Users have flocked Zain shops to get Zain lines and some savvy operators have taken to selling people SIM cards on the lines snaking out of such shops.

In Mombasa, the dealer there was cleverer. As residents awoke to Zain's full-page ads on the new tariff, the dealer opted to hand out lines to everyone who bought a newspaper.

Manoj Kohli, the Bharti Airtel CEO for international operations had this to say about the Kenyan market.

"We are not saying that we will succeed 100 per cent in capturing market leadership. But we will make it extremely difficult for our competitor to operate."