One Com, incorporated in 2006, offers Safaricom the technology and platform to deliver broader services, including WiMAX access, which enables internet-based video, voice and data transmission. The disruption of upcoming wireless service providers will shake telco service providers to the core. This because the provision of voice solutions, a key pillar and cash cow for telcos in the cellular space, will come under attack from almost free VOIP solutions. And as WiMAX improves, and comes to provide voice-on-the-move as good as GSM cellular, then the potential for costs falling almost to zero in voice solutions will be realised. 

Take the case of the acquisitions of the newly-formed ATMT (African Telecom, Media and Technology) fund headed by Richard Bell. The fund, targeting over Ksh6 billion, will bring to the market strengthened VOIP providers that are already building WiMAX base stations that will complicate the very soup of the day that bulked mobile telco providers into giants - voice solutions. Currently, ATMT has under its wings 3 major acquisitions: Wananchi Online; Mitsumi Cable, a cable TV service provider; and Simbanet, a corporate internet/data provider. From these , the greatest danger to GSM-based cellular mobile voice services providers is Wananchi Online; it is currently on a drive to build a WiMAX network with approximately 130 base stations. Much as their targets for broadband internet services are homes, no doubt an increased uptake of VOIP in homes and mobile VOIP as WiMAX reliability improves will challenge the very existence of expensive licences for cellular GSM frequencies. 

Wananchi Online executives are increasingly confident about WiMAX strategy. They see WiMAX as a great enabler of the last mile of broadband connectivity, building on top of greater bandwidth in terrestrial fibre. This infrastructure, however, seems to offer the characteristics of being the greatest piggyback facilitator of Mobile WiMAX, which Safaricom needs to start worrying about. Not because Safaricom might lack the technology; ironically, Safaricom has a 20% stake in the terrestrial fibre TEAMS cable coming down from UAE. The worry would be the disruptive business models that will be used to monetize cheap internet-based calls, such as the likes of Skype. The availability of mobile Skype to consumers feeling the heat of expensive cellular-based voice solutions should be of great concern to Safaricom. Buying into a WiMAX solutions provider might provide it with a window of opportunity to learn about these threats. 

However, these are not the only threats facing Safaricom. Google has asserted that it would like to see a situation where mobile access infrastructures were 'free' for voice and and data; typical of Google to think of new ways of monetizing access time by end users, as it has perfected in the online search arena. It has even gone further in the US, bidding for spectrum space, prompting fear amongst established Cellular providers. 

In essence, new business models around the provision of voice solutions might be on the way, as other smaller start-up firms think of ways to monetize wireless VOIP. While it can't yet support calls made while moving from one wireless access point to another, companies from Skype to EzLoop are offering consumers the ability to walk and talk freely within a hotspot. 

Nevertheless, it is not over yet for Safaricom.  It could underwrite its future revenue streams as voice becomes commodified or even free, by just taking a 51% stake in One Com. The greatest mistake Safaricom might make is to try to 'integrate' the operations of One Com into its GSM cellular-based core business. If Safaricom tries this strategy, it will be inhibiting the disruptive potential of One Com for new ways of monetizing VOIP. Taking up VOIP as a cheaper communciation alternative that can be billed as per other cellular services using the current business for billing, i.e. pre-paid or post-paid, would be a disaster for a firm that will be under siege from both irrational investors and price-cutting competitors vying for a share of the cellular voice market. 

The theory of disruptive innovation states that established firms have a tougher time taking advantage of disruptive innovations than do smaller start-ups. This because, over time, established firms optimize their processes, resources, and values to succeed in their current environments. When faced with a truly disruptive innovation, these firms have difficulty changing their business models to take advantage of the new concept. For example, instead of offering a quad-play package (traditional landline voice, wireless, video, and internet) over the new WiMAX network, Safaricom might be more inclined to try to use its existing infrastructure to leverage its existing investment in cellular GSM as much as possible and only sparingly use WiMAX to augment its offerings. Of course, this makes sense for the incumbent firms, given their large investments in their current infrastructure, but it also has the effect of slowing down innovation by keeping the market from realizing the full potential of WiMAX. 

Smaller start-ups, on the other hand, have none of the historical baggage of the incumbents and are free to enter the market in a truly disruptive way. It might therefore be of great importance for Safaricom to keep One Com as a separate entity, concentrated on exploiting the next platform for voice and data solutions.

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