Category Archives: Safaricom

Kutwa Tuesday: death of the cyber café

Once, long ago, I wrote a paper about a business case to put up a cyber café in an airport terminal – for transit passengers to browse there as they waited for the flight to connect. That model is in place today in airports all over the world (not my doing) but its’ time may already have passed with wi-fi zones and wireless laptops whose users don’t need to use cyber cafe facilities anymore.

But even cyber cafes’ that are in town may be under threat.

Until three months ago I’d spend about an hour in a cyber cafe each Saturday and Sunday. I’d go there to my check my-email and then browse quite a bit when I was done.

But all that has stopped as I now check my email and browse for information I need to know instantly – from hotmail, gmail, sports scores, stock prices – using a plain old phone (not bambanet, or blackberry) as the Safaricom EDGE service is available on most of their phones even some of the cheaper ones. I get the information wherever I am and don’t have to visit a cyber cafe unless it’s to print a document or download a PDF report.

Oil slick
The sale of Somken petrol stations to the National Oil Corporation of Kenya (NOCK) has been put on hold ever since the previous NOCK MD resigned from the company. Haggles remain over the high price bid for the stations.

BAT smoke-out
BAT Ghana has voluntarily de-listed from the Ghana Stock Exchange.

Does that portend anything for BAT Kenya one of the blue chip stocks on the Nairobi stock exchange and one of the highest paying dividend stocks? Cigarette smokers have had their smoking freedom curtailed in Nairobi and other urban areas (Nairobi city has less than a half dozen outdoor smoking points) making them clandestine smokers who hide on staircases and bathrooms (but at least most bars retain a smoking section). What impact will that have on sales?

BAT Kenya manufactures cigarettes here and exports a significant amount to other regional countries (who have not curtailed smoking) which should cushion it slightly from the new laws.

Stockbroker still frozen
The statutory management of Francis Thuo stockbrokers (by the Nairobi Stock Exchange) has been extended for another six months.

the pyramids that collapsed
Much has changed in the one year since nyramid schemes were highlighted here. Since then they have come under increasing pressure from the government, SACCO’s and most important the banks who frozen account necessary for their operations (and who probably still hold the schemes ‘missing billions’ that investors are crying for).

The latest collapse was Amity and it was preceded by Sasanet investment co-op (suspended operations), Spell investments (suspended operations), Circuit investments (suspended operations), CLIP (suspended operations), DECI (suspended operations), and the Kenya business community savings & credit society (Kenya akiba) (suspended operations)

Kenya news on Youtube
Some people say they are tired of political news, while others can’t get enough of it. But the Nation Media Group has gone ahead and made their new clips available on Youtube

Pesa point wins
Two yard ago Pesapoint was launched and it began a battle with Kenswitch – another network of banks sharing ATM facilities. But today Pesa Point has signed up most mid-size banks and have a network of almost 200 ATM machines – and last month added corporate banking giant Standard Chartered to their network.

Tech Tuesday

SABC – Highway Africa Awards 2007 for Innovative use of new media technology in Africa. Awards are given in three categories: 1) Individual/Student, 2) Non-profit and 3) Corporate.
– Individual and Non-profit category: communications which find innovative ways to overcome the limitations of the existing African infrastructure.
– Corporate category: creative adaptation of global technologies in an African media context.
– Other criteria (which apply to both categories)is the use of new media to benefit press freedom in Africa and encourage social empowerment in African communities. Also the functionality of websites/blogs/wikis is an absolute must, interactive features, design and use of mobile technology in an innovative way is encouraged.Entries to be submitted online or via fax by 20/8

Digital Village Concept opportunities
(i) Own manage digital village center/kiosk (there will be one in each constituency). Applicant’s must have experience in running cyber cafe, computer lab and already have electricity, steady clients, premises and qualified staff. Details here and deadline is 20/8
(ii) Supply products/services such as hardware/software, loans/finance, stationery, furniture, and supplies. Details here and deadline is 20/8.

Threat to ISP’s: Safaricom has applied for a 3G license to offer broadband wireless through their extensive base station network to subscribers.

Congratulations to TED Global Fellow Paul Kukubo who has been appointed as chief executive of the Kenya ICT Board

Safaricom IPO and other opportunities

Safaricom IPO: The calendar is on for the sale of 25% of Safaricom shares to the public and the government of Kenya (who are yielding part of their 60% ownership) have advertised for a lead transaction advisor, lead sponsoring broker, (4) co-sponsoring brokers, legal advisor, reporting accountant, PR firm, advertising consultant, receiving bank, and a share registrar for the IPO. Details at investmentsecretary@treasury.co.ke D/L is 16 July. There have been complaints about firms offering such work for free to gain prestige

Safaricom call center. The company is also seeking to outsource customer service for prepaid subscribers to an external firm (Current traffic ranges from 10,000 – 20,000 calls per day). Details from dngobia@safaricom.co.ke and D/L is 11/7

other happenings
Pipeline finance: The Kenya Pipeline Company seeking financing for the Nairobi-Mombasa and Nairobi-Western Kenya (Nakuru, Kisumu, Eldoret) segments amounting to Kshs. 7.5 billion ($107) million over the next 2 years. D/L is 31/7

Housing: The National Housing Corporation offering 890 3-bedroom flats in Langata phase II ranging from 3.9 to 4.1 million each ($55,000 – $58,000). The corporation is also selling 38 maisonettes in Kiambu phase ii at between 3.2 and 3.4 million shillings.

Barclays
– Good : The bank has hired external debt collection agents – outsourcing a time consuming tedious function.
– Not good : The only thing worse then taking a personal loan to buy shares is using a credit card to buy shares. An investor is already in the hole, and needs his shares return 30% a year, just to break even. Using a debit card may be ok though, but factor in the card fees.

Education
– New Aga Khan University campus to be set up in Nairobi
– Moi University to soon offer a masters degree in banking & finance

Media
– Desperate Housewives start next month on KTN. Hope they don’t butcher the show like they did with the Soprano’s (heavily edited, shown at 11 PM on Sunday night and often out of sequence)
– The Naiorbi Nairobi Star (new daily newspaper from KISS FM team ) hit the streets today with a lot of fanfare, but does it have legs?

Mostly Safaricom

The ban on plastic paper announced in last Thursday’s budget has temporarily been reversed. It was an amorphous declaration covering all manner of plastics (consumer, industrial) that was likely to lead to an unintended increase in the price of many items.

Safaricom

  • Has lowered rates for phone calls and SMS from today. Mobile companies have become increasingly competitive with Celtel and Telkom Wireless – who have deployed VoIP and roaming features – nipping at the edges of Safaricom’s base. Are free weekends from Celtel the next offering?
  • Safaricom has opted to recycle numbers now that they were running out of lines(prefix 0720-0729. Unused phone lines (not used/topped up) for 4 months can now be reclaimed by the company and be resold (previously they expired after 1 year)
  • I’ve noticed on my recent travels in South Africa, Uganda and Tanzania – that all Vodafone-affiliated networks have a cool feature that lets you know where you are (location). It was tested once in Kenya last year but the flip side to this is that it reminds paranoid people that the phone companies (and other interested authorities) know if you are at Ngurdoto Mountain Lodge, Johannesburg airport or the Speke hotel and that they can find you and perhaps not wanting to spook some subscribers have not activated the feature in Kenya. [Read how it affected a lion’s phone choice and more on big brother from Uganda and South Africa]
  • 30% of Safaricom up for an IPO this fiscal year.

Sports TV: G TV are expected to have 80% of premiership games this year. Is that reason enough for DSTV to panic? (I am not a subscriber). There’s also Oxygen (cable) TV (costs Kshs 999 per month), and free TV (Nation (with La Liga), Citizen (rename them ChelseaTV), KBC, KTN and other channels with various sports offerings. The big attraction of DSTV is sports, but also the other channels like Movies, MNET and Discovery. DSTV now assures that they will still have games of the big four (Arsenal, Chelsea, Liverpool Man U – listed alphabetically, not by rank)- two every Saturday, two every Sunday, and one on Monday night. So what is 80% worth if it features teams like Blackburn, Man City, Sunderland and Wigan at a cost of about Kshs 2,200 per month?

The real Safaricom EDGE

(Premium) Story in the Nation about the Cabinet being presented with a paper to approve the sale of 25% of Safaricom to the public.

This is a winning card this election year that will be foremost in the minds of investors and voters. A well managed Safaricom IPO before December could deliver more votes than needless voter expenditure or rhetoric from any leader.

Power shift: Meanwhile Bloomberg reports that – for the first time since WWII more money will be raised from European IPO’s than US ones. Stringent regulations, high costs (6.7% of IPO versus 3.3% for Europe) and the weak US$ to blame as 14 or the 15 biggest recent IPO’s were listed outside the US.