Category Archives: kenya communications

From Balancing Act Africa (No. 252)

FOUR MORE NATIONAL OPERATORS JOIN EASSY PROJECT: BURUNDI, ZAMBIA AND LESOTHO

Tanzania Telecommunications Company Limited (TTCL) and three other national
operators from Burundi, Zambia and Lesotho will soon join the East African
Submarine Cable System (EASSy) project – bringing to 18 from 14 that signed earlier on. Together the operators will soon be required to raise USD100 million half of the amount of money required for the fiber optic cable on the east African coast. Other Telecom companies that signed under the project include Telecom Kenya. The 8,840 km undersea cable that will run from Djibouti to South Africa will cost over USD200 million, but its operation and maintenance will require funds that EASSy project officials say will be generated from voice and data traffic generated by telecom operators in the region.

KENYAN REGULATOR CCK SLAMS TELKOM OVER UNMET GOALS
Fixed line telecommunications service provider Telkom Kenya has failed to meet its licensing obligations, the sector regulator has said. In its latest annual report the Communications Commission of Kenya (CCK) says Telkom Kenya failed to translate its long time monopoly into increased number of fixed line connections over the past three years. Consequently, CCK says Telkom¹s failure will hamper efforts to encourage other players in the market to lower the cost of Internet and mobile phone use charges.

new licences
The Communication Commission of Kenya (CCK) has gazetted nine companies for various licences in the telecom sector. The latest issue of the Kenya Gazette Notice indicates that CCK has lined-up Comtec Intergration Systems and Lanbase Communications Limited for Internet Backbone and Gateway services operator’s licence. Two other companies linked with Comtec and Lanbase have been gazetted for
three different licences. Comtec Training and Management Services has been lined up for a local loop operator’s licence while Lanbase Communications is gunning for a leased circuit resale licence. Comtec has also applied for a Private Data Network Operator (PDNO) licence.Also gazetted are KTIG Consulting Limited and Africa Spinoff Limited for a Local loop operator’s licence. Africa Spinoff Limited has also applied for a PDNO licence.Callkey (East Africa) Limited and EDP Limited have been lined up for an Internet Service Provider (ISP) licence while Scandinavia Express Kenya Limited is currently waiting for a regional courier operator’s licence.

Tuju vs. CCK saga takes another turn

– The move has full Cabinet backing and is said to relate to investigations into improprieties in the selection of a Second National Operator.
– Unfortunately, no evidence has yet been produced as to what these improprieties are and unless legal action follows, DG Sammy Kirui will have in effect been judged guilty without any formal evidence being presented.
– The losing bidders for the SNO licence included a group of wealthy diaspora Kenyans based in the USA.

Industry in Disarray
– The CCK Board plays such a crucial role that now no further licenses can be issued, no disputes can be settled and no formal regulatory interventions can take place and there is no clear communication from the Government as to how affairs within the sector are to be managed”.
– If you were of a paranoid turn of mind, you might think that this is just what the Government might want. It means that there is no-one who can order Telkom Kenya to behave in a competitive fashion. The near-bankrupt Telkom Kenya can stagger forward without significant competition. And illegal call diversion within Telkom Kenya may or may not be continuing but there is no way of telling because any investigation has now been halted.

Restructure Telkom using Safaricom

(In an interview in the financial post (Feb. 14) Safaricom MD admits that he hopes that one day, Safaricom (Owned 60% by Kenya Govt/Telkom, 40% by Vodaphone) will go public and that Econet does not have much of a chance, especially if they have to build their own network. He also admits to some failures such as GPRS and a phone re-cycling project. Also, 98% of Safaricom’s customer base are pre-paid, and while he wishes to lower the cost of making calls, he points out that 26% of airtime goes to taxes.

The Government should sell out of Safaricom and use the cash to restructure Telkom and invest in other communication or development areas. Of Telkom’s 16 billion debts, a significant amount is owed to Safaricom and Kencell, and those can be re-negotiated. Telkom is losing out, as it can’t afford to compete in deregulated markets as more competitors are licensed. There are investors willing to partner with Telkom but only after it undertakes a costly retrenchment and restructuring in which can be funded with cash from a safaricom public offering.

In 2002, Safaricom had revenue of 9 billion (753m profit), and in 2003 it was 14 billion (with 2 billion profit). According to Joseph, in first 6 months of 2004, the government received 1.2 billion in corporate income tax from Safaricom as well as 3.5 billion in duties and fees (on phone calls, SMS, new lines etc). Safaricom has paid over 25 billion in taxes to date and the government will continue to earn between 5 billion and 10 billion a year from Safaricom in annual taxes even after privatisation.

The government is sitting on value and goodwill of its share of Safaricom and should use this opportunity to invite the public to also invest in the sector. Safaricom will probably be the most over-subscribed offering in the history of East Africa (surpassing Kenya Airways and Kenya Commercial Bank) and will enable the government to restructure Telkom Kenya.

Rescue the Government Spokesman

Dr. Alfred Mutua clearly needs to be re-directed. The problem is that he does not speak for the president, the government or his minister – he has to hunt for news to give at his press conference, and he ducks controversial topics because he knows as little as the public that he’s informing.

The President, diplomats, Minister’s and for the most part the public at large do not take him seriously. Plus in Kenya, if you stick a camera before anyone’s face, for the most part, anyone can give a press conference – a chief who has confiscated bhang or arrested a witchdoctor does not feel that he needs someone else to explain his heroics – he can explain it to KTN himself. But like other officials e.g. allegations of corruption, it is not in his nature to resign – he feels he has done nothing wrong – so he’ll continue to have the government cut a large check for him each month. And there’s no one to rescue him from a job that is harming his credibility and future. How will appear in history books?

Anyway I have some advice for him so he does not slide into irrelevance and have to be nudged out like Dee Dee Myers, Clinton’s first (female) press secretary, who was clearly overwhelmed by the job

(1) Somehow get close to someone, powerful who’ll get your access to the president (last year it was Amb. Muthaura, this year it appears to be the First Lady)

(2) The president is the one person Kenyans want to hear from, and he’s mostly silent i.e. he needs an articulate spokesman (you) to communicate on his behalf- convince him that you are that person

(3) Insist on attending cabinet meetings, or that you are briefed immediately after and/or receive minutes of each cabinet meeting – and read the Kenya gazette, foreign press and street tabloids

(4) Now that you’re a State House insider, throw your weight around; ask minister’s to desist from making statements at rural rallies, ask them to check with you before making policy statements (which you are supposed to coordinate) – tell them investors don’t like confusion created by ministers who contradict each other. And above all don’t be afraid to contradict a Minister.

(5) Give a press conference every day. Answer all question’s posed by the media – there’s nothing wrong with saying “I can’t comment on that” “I’ll get back to you,” or “I have no information” or even “I was not in the RAV4” – but above all don’t avoid the press. If you have no news that day, reporters will provide the questions and, you might make the news. E.g. PS Kinyua did not mean to criticize extravagant ministers last week – he was at an NSE function, and was responding to a journalist’s question, – still, it became the business news story of the day. So answer question’s that the public wants to know about e.g. Ndwiga, NARC elections, corruption, the Constitution,

In short, become the White House spokesman for Kenya. George Bush rarely gives press conferences, but the White House spokesman/communications director appears each day and answers questions on Congo, Kazakhstan, Tax cuts, abortion etc. – taking flak for his inarticulate boss. The job is distasteful, and you might get fed up with the lies, bile, backstabbing – which is why most press secretaries tend to burn up and resign before their boss’s term ends.

Celtel names new CEO

Celtel, Kenyan’s 2nd largest mobile operator has named Mr Gerhard May as its new chief executive, replacing Mr John McDonald who oversaw the firm’s transition from KenCell to its current business name Celtel.