When Airtel played the Bendover song in front of Safaricom House around September last year (if my memory services me right) Safaricom's share price was well above the IPO price, as i write the share price seats well below its IPO price taking a beating from the intense price wars that has occurred in Kenya's Telcoms sector in the past months.

So will Safaricom survive the onslaught? I say YES, and here is why..

1. Costs-the first thing Mr Bob Collymore tackled when he took over at Safaricom House, he wielded his axe on Safaricom's bloated Exec structure, shedding off what he deemed excess, end results is lower COSTS.

2. Volumes and Penetration-Safaricom has the highest subscriber base and market penetration, although there will be a drop in average revenue per user I expect an increase in calling volumes because calling is now cheaper shielding some of the potential losses from voice.

3. Value added products- before you made that call, you Facebooked or Twittered and then send someone money via Mpesa, its this kind of all in one basket of services that other companies will find hard to replicate

4. Quality-it was just the other day when a friend of mine dumped his Airtel modem due to poor connectivity and opted for a Safaricom one, this shows not everybody is interested in cheap this, most people want affordable quality services or products.

Conclusions

Write off Safaricom at your own peril.

By Mika D.M. read more from his blog Here