Why You Shouldn't Trust Mobile Money Promotions

According to the Communications Commission of Kenya (CCK) there are 29.7 million mobile subscribers in Kenya. That number will continue to grow unless some cataclysmic phenomenon intervenes. This means that every time you take part in a promotional event to win anything using your mobile phone, you are rolling a pair of dice with more than 29 million different possibilities

“The more money you spend the more your chances of winning?” How many times have you tried this and failed? How exactly do these oh-so-generous promotional events come up with a winner? What methods do they use to determine the victor?

Some say that winners are picked at random and sometimes this is true. Take one Carol Adoga Mwanbihi, for instance. The Zimmerman-based Pharmacist recently won a brand new Mercedes E-200 in Safaricom’s Timiza na M-PESA promotion grand draw.

However, that is not always the case. You can try a thousand times and fail. You can try just once and actually win that car, that goat, that plot of land or even 10 million shillings. But do you know what really happens behind the proverbial curtain?

Rigged Promotions?

Have you ever read about some millionaire making even more money from a Safaricom promotion? They probably spend more on airtime than their middle class counterparts yet you never see them on the news, holding up gigantic mock cheques and praising their service providers for giving them the chance to further increase their wealth.

Think about the people you see in the newspapers holding those cheques. Some of them look like they actually need the money. Have you heard what they usually plan to do with their winnings? Some of them say that they will use the money to pay off debts (bank loans, school fees, rent, et cetera) while others plan on buying land and housing or creating a better life for their families.

Maybe these competitions are constructed simply for the sake of helping those who need it the most. After all, service providers have some, if not all, of your mobile money transaction information at their fingertips. They know how much M-Pesa traffic you generate. They Know how much Orange Money you have and they are aware of how much you spend on airtime every minute of everyday. Based on these statistics, they can easily come up with a system that favours a particular class of people.

In which case, loading KES 500 worth of airtime every other day kills your chances of winning while that poor individual who only has KES 5 of talk time to spare gets to walk away with the prize. And you get to pay for his winnings.

Think about it: if one chance costs KES 10 and every subscriber applies, then over 297 million can be raised (assuming all the networks put aside their differences to create one big promotion). This means that millions of subscribers are actually raising the money needed to fund the competition.

[caption id="attachment_28407" align="alignright" width="273"] Image source: top15poker.com[/caption]

Rigging and favourtism aside, it’s always a game of numbers. Assuming all these competitions are fair, what exactly are your chances of winning?

Well, Safaricom has 19,006,981 subscribers, which is about 64% of the country’s market share.  Airtel has 4,914,060, representing 16.5% of all mobile phone users.

Orange Kenya has 10% of the market share with 3,122,751 subscribers while Yu Mobile (Essar) has about 2.6 million users representing the remaining 9.5% (These numbers are based on results from the last quarter of 2012).

Below is a list depicting your chances of winning if you subscribed with only one application:

Service Provider Chances of Winning*
Safaricom 1 in 19 million
Airtel 1 in 4.9 million
Orange  1 in 3.1 million
Yu Mobile 1 in 2.6 million

*Chances of winning are approximated and based on every individual draw.

Bear in mind that 1% of all lottery winners go bankrupt every year. A study by The Guardian reveals that 15% of winners use the cash to start a business while 59% give up their jobs.

Maybe mobile subscribers should try to unanimously boycott such competitions. It might be better to let the poverty-stricken consumers try their luck without you having to foot the bill. If Airtel and Safaricom can raise millions without the direct assistance of their middle class subscribers then why don’t they give away a small fraction of their profits to some destitute Kenyan with a Mobile money account that reads nil?

Instead of taxing the masses, why don’t they dig into their own pockets and bankroll their own promotions? If they can afford to pay for advertising, they can surely afford to cover the cost of a few promotions. But if you insist on trying your luck, then feel free to enjoy these “hunger games”.

And may the odds be ever in your favour.

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Abacus is the result of over 10 years market experience and is licensed as a data vendor by the Nairobi Securities Exchange

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