Category Archives: Zain

Delta, Zain and KQ Tweet Around

and other Bank Twits

Twitter is a micro-blogging tool that is really nifty for doing mini-posts, forward and other remarks that (are on any subject) and are maybe not worthy of a full blog post. Here’s a summary of the last few days on Twitter:

May 29

  • @MauriYambo Kenya Co-op Bank directors shareholding Stinks http://bit.ly/EvI2d
  • KTN’s Larry … Madowo @larrymadowo on Twitter
  • After a few drinks I discover I may be related to @kafai and @gishungwa! #TIA

May 30

  • Morning traffic jams in Nairobi Kileleshwa. Spy some Apts being built into the river & fear that one day, river will rise & reclaim its banks.
  • Government of Kenya shot itself in foot with punitive alcohol tax. Spirit brewers going belly up, Uhuru should correct.

May 31

  • Happy birthday young @intelligensia

Jun 1

  • @mwaikibaki will launch Kenya’s fibre optic cable this month.
  • @mwaikibaki says Kenya census starts august 24. Ends with his famous phrase, calls hecklers #pumbavu
  • Cadbury seems to have discontinued my fave choc wafer, while alvaro is on sale – buy 5, get 1 free!

June 2

  • Some Nairobi buildings were designed by Mario bros – with secret floors, VIP lifts, hidden entrances, hostile guards to negotiate.
  • Santander Bank may sponsor Ferrari next year – does that also make Alonso their new driver? http://tinyurl.com/mgukmu
  • Does patient capitalist Jacqueline Novogratz @jnovogratz have the answer to the role of aid in development? http://tinyurl.com/q9llxb
  • The African Union wants to set up an African Central Bank http://bit.ly/QcMav
  • @TerryanneC Delta Airlines maiden flight earlier scheduled for tomorrow from Atlanta to Kenya postponed indefinitely
  • If I had to subscribe to one magazine for life, it would be the Economist

June 3

  • @coldtusker even without airport CEO, artur, 1jet1 – US may want more than one airport checkpoint to filter passengers, so non-stop no go.
  • @mamboleo ranneberger welcomed delta in the news and was to officiate today. Mwakwere has been in US for a week waiting to fly
  • @MIMImagazine new Sade album this year http://bit.ly/Ywv14\
  • What’s wrong with Kenya airport Security? http://tinyurl.com/qmmem2
  • Want to speak like Kenyan kids? – try the Sheng dictionary http://www.sheng.co.ke/kamu…
  • Got an accurate shares statement by e-mail from CDSC Kenya – so my stockbroker is still honest

June 4

  • Should companies care about what’s written about them online? http://bit.ly/oiYFw
  • Former ministers and MP’s mentioned in parliament as masterminds of some collapsed Kenya pyramid
  • Michuki and Ruto top a NTV viewer poll of best performing ministers in Kenya. Ok… #Kenya

June 5

  • @alykhansatchu “In September 2008, all hell broke loose, it fell like the Titanic” – Titus Naikuni Kenya Airways CEO
  • @coldtusker Kenya Airways losing 4 billion after Zain’s 7 billion loss, there’s a lot of blood!

June 6

  • Nairobi city council asking 100 shillings ($1.25) to photocopy each 100 words of new laws that will punish residents #FAIL
  • Follow George Ayittey @ayittey for a harsh dose of Afro-reality
  • JKIA arrival lounge – musician Jua Cali and Uganda leader Kizza Besige arrive unnoticed

June 7

  • Button-Brawn wins turkey GP. Kenyan crowds are ABB – Anyone but Button
  • @karuoro does XYZ fail for taking shots at politicos who are too funny to be imitated or is it the poor voices?

June 8

  • Reading Africa confidential to see which way Gabon goes: Lady Senate president should succeed, but Bongo Jnr. is minister of defence.
  • Weekendgossip: Delta planned Nairobi route before they merged with Northwest – who are KLM partners. KLM have invested for many years in Kenya Airways so does it make sense for Delta to fly to Nairobi?

June 9

  • Why would Wanjiku Mugane quit the EABL Board? http://bit.ly/u6a6V
  • R/T @kainvestor @kachwanya Zain looks to close $12bn deal to sell Africa unit – report: http://tinyurl.com/m4wofy
  • Soldiers are not allowed with guns in the room (and other hotel rules) http://bit.ly/BCAV8
  • Time to do the tax return thing – 3 out of 4 years waiting for a tax refund.

June 10

  • How the Lakers won Game 2: I wish Bill Simmons watched Soccer and F1 because there are more conspiracies than NBA http://tinyurl.com/ma2gax
  • The folks at DNA Kenya have published a Promiscuity Index Report: Ave No. of Steady Mistresses! Ave No. of kids per steady Mistress! Ave No. of 1 night stands since wedding! #DNAKenya http://www.dnakenya.com

spot the difference

Centum seeks Carbacid

and other Bank Twits

Twitter is a micro-blogging tool that is really nifty for doing mini-posts, forwards and other remarks that (are on any subject) and are maybe not worthy of a full blog post. Here’s a summary of my week on Twitter:

– @louizah Zain Vuka has ended? Please confirm
– @NTV showing IFC-funded docu on women entrepreneurs – meaning manu-arsenal will be on tape delay – WHY? next @NTV ditched a static-filled channel & skipped their ‘half time’ piece to present second half live, on a much clearer signal! Kudos
– Sports journo era over? Player asks for trade on blog team obliges on Twitter player thanks fans on Facebook http://tinyurl.com/d967eu
– blog post Why Safaricom should spin-off MPesa http://bit.ly/gYZ86
– The Central Bank of Kenya reports have become incomprehensible B.S
– Upgraded Safaricom Investor relations page has media and CEO briefings http://bit.ly/VBZ2f
– Tanzania will now recognize Kenya manufacturers mark of quality http://bit.ly/USZHg
– Delta Air round-trip intro fares from Nairobi include (ex-tax) $650-NY/DC, $975-ATL/Chi/ Dallas, $1124-LA/SF and $1440-Detroit
– @kahenya @jamesmurua likes Riviera, which has good crowd and facilities, but beer is pricey and the place is a fire-trap
– So Joe Biden met Nairobi Mayor Majiwa in Chicago. There, that’s the end of the joke
– Safaricom CEO says M-Pesa not yet profitable http://bit.ly/TDV8D
– @leofaya says Kenyan promoters are killing Facebook http://bit.ly/zBHXB
– Today’s pavement uprooting is sponsored by Access Kenya – as the fibre optic railway is laid around Nairobi
– @Archermishale sports conspiracy goes that where a sport wants to sway a big game, they put in a low-quality ref, but didn’t happen on Wednesday
– Safaricom partners with Kenya’s largest bank KCB http://bit.ly/J4l92
– Kenya budget saga ($115 million) blamed on a typo – Quote ODB “N___ please!” http://tinyurl.com/p5hoyo
– blog post: two bank shareholder meetings same day same building same time http://bit.ly/86lNq
– @pinkm so you can only use debit, but not credit card to buy amazon books from KE? Interesting
– Ethiopian Air applies to fly from Nairobi to Amsterdam and Nairobi –Liege (Belgium)
– Land spin: Could there be a link between Migingo Island and the Kampala land Kenya got from the Uganda military?
– If MTN buy Yu or Access Kenya, they will have to negotiate with MTN matatu society for use of the name.
– blog post Its Our Turn to Eat (is credit card worthy) http://bit.ly/YnriQ
– NMG 2008 report gives prominent mention of new digital division, Making-Nation DVD and Zuqka portal http://tinyurl.com/qkcphc
– Centum applies to the CMA to buy Kshs. 350M of Carbacid shares and be the largest shareholder of the Nairobi listed (but suspended) company
– Senator cards advise customers to only upload to https, not http sites. It’s rare to find credit company giving card advice
– From Mars Group: Parliament’s Report on the Kenya Budget inconsistencies http://blog.marsgroupkenya….

Zain in Kenya

Vuka Verdict:

Zain introduced the Vuka revolutionary flat rate call package of 8 shilling per ($0.10) minute to call all other networks in October 2008. After an initial surge in customers. What do the numbers bear out?

Rough dialing

– Zain gained a million customers 3.08 million (up from 2.1 million)
– Zain lost revenue $162 million (~13 billion) down from $194 million
– Zain lost big money: Net loss was $90 million in 2008 compared to a loss of $21 million in 2006. the ~Kshs. 7.2 billion is perhaps the largest corporate loss in Kenya for a single year

Zain outlook

– The 2009 numbers should be much better as marketing costs of Zain’s Vuka were quite heavy for the last quarter of 2008 and by which time customer numbers were still growing. But with just 5% of the entire Zain group customers, Kenya may be an expensive group to manage in what they consider to be a competitive market with low revenues [Average revenue per user/ARPU was $6 (down from $7)]. Zain claims 18% market share to Safaricom’s 77% and 5% for Orange
– Zain owned 80% of the Kenyan operation, up from 70% in 2007
– If Zain can state the population of Kenya is 38.5 million (up from 37.5 in 2007), is there need for an expensive Government census which will take place later this year?

Urban Inflation Index: March 2009

Changes in the three months ago since my last review in December 2008 and also compared to February 2008, which was just over a year ago.

In 2009, oil prices and maize prices have become the national talk as scandals, shortages, and price hikes have plague these industries causing grave concern that the country could be destabilized.

With maize, a shortage of maize flour on supermarkets coupled with shady deals were highlighted in the media all leading to a motion of no confidence in Parliament against the Agriculture Minister in February 2009. it was shot down

In oil/petrol, the collapse of Triton petrol, a small politically-connected oil marketer had ripples across the industry. The firm appears to have made a big gamble and purchased and stored excessive stocks in the expectation that oil prices would remain high, but when they dropped, the firm imploded and the chief executive fled to India. It has become a monster scandal with staff losing their jobs, banks suing the government (through the oil storage and pipeline companies) and calls for another no confidence vote in Parliament, this time against the Energy Minister.

changes in the last three months

Gotten cheaper

Fuel: A Litre of petrol fuel (at local petrol station) is now Kshs. 75 (~$4.2 per gallon) which is about 20% cheaper than it was 92.7 in December 2008. Shell Petroleum led the price drop, forcing other oil marketers to follow suit and probably did in Triton with their price cut in December 2008. Petrol was Kshs. 88 a year ago

Unchanged

Staple Food: Maize flour which is used to make Ugali that is eaten by a majority of Kenyans daily. A 2 kg. Unga pack at Uchumi today costs Kshs. 96, compared to Kshs. 97 in December 2008. However it cost just Kshs. 52 a year ago

Communications: Despite the presence of two additional phone companies, the mobile price war has cooled and calls cost about Kshs. 8 (~$0.10) per minute. With Zain, the price applies across all networks, but for Safaricom it’s within their network only. New companies are offering gimmicks like Yu’s Kshs. 0.50 per minute (after making calls for two minuets at Kshs.7.50). However other prices, notably in data and equipment (handset prices) have dropped. Safaricom modem’s cost less than ½ their introduction price, and features like Picture messaging (SMS) now costs Kshs 3.50 ($0.04) (it was introduced at 20) a year ago Safaricom calls were also about 8 shillings per minute

More Expensive

Electricity: my bill last month is Kshs 1,800 – slightly less than the bill a year ago. However by looking at the components that make up the bill – fixed charge is Kshs. 240 (was 175 a year ago), fuel cost adjustment is 427c per kwh (was 199c a year ago), forex adjustment was 63c per kwh (was 31c per kwh) – all causing my bill to cost about 70% higher than my approximate consumption a year ago. This is also a sore point with Kenyan manufacturers and industries who have complained (PDF) about the high tariffs even as Kenya power & lighting company announced improved profits for 2008.

Foreign Exchange: 1 US$ equals Kshs. 80.07, it was 79.08 in December 2008. Remittances to Kenya which have dropped every month since October 2008, are partly to blame. US$1 was 70.7 shillings a year ago

Entertainment: A bottle of Tusker beer (at local pub) is Kshs. 130 ($1.60) up from Kshs. 120 in December 2008. East African Breweries, Kenya’s leading brewer, has complained about high input costs and new taxation, and for once their share price is almost as cheap as the recommended retail price of their main seller – a bottle of Tusker beer was 120 a year ago

Other food item: Sugar (2 kg. Mumias pack) is at 165, it was Kshs. 160 last December. 150 a year ago

EDIT: Also, more expensive is Housing – the rent was hiked 40% in January 2009; however that’s still about ½ what I’d be comfortable paying for a mortgage in the neighborhood.

Urban Inflation Index: December 2008

Four months ago last review (should be a quarterly exercise going forward) . 2008 has been a year with high prices and cost of living factors in the news. From the post-election violence in January to the (then) world oil prices, the pinch has been felt in Kenya.

The Government has come under pressure, but without addressing of its own excesses (procurement, new offices & limousines, parliemantarians, councilors and judges who refuse to pay income tax), has likewise tried to run the screw on the corporate sector – resulting in efforts to reduce the price of petrol and now maize flour (staple food)

Gotten more expensive

Staple food: Maize flour which is used to make Ugali, that is eaten by a majority of Kenyans daily. A 2 kg. Unga pack at Uchumi today costs Kshs. 97 which is 1/3 more than the Kshs. 73 four months ago. Farming woes continue, the crop this year is bad and Unga who said that they ran out of flour, among other revelations at their AGM, also stated that the maize harvest in 2009 will be worse and high prices will continue. There have been allegations of dodgy imports and the Government is today trying to arm-twist the price of Unga down to Kshs. 55 (EDIT – the Government announced today that maize will cost Kshs. 72 in urban areas and Kshs. 52 in rural areas)
Other food item: Sugar (2 kg. Mumias pack) is at Kshs. 160, up from Kshs. 145 three months ago. For Mumias customers and shareholders, the price is even lower for other unbranded sugar(s) on shelves.

Foreign Exchange: 1 US$ equals Kshs. 79.08, (18% weaker) than the Kshs. 67.4 four months go. This is partly the strengthening of the dollar, partly outflows from Kenya (at the NSE) – and comes after the shilling (while strong) had cushioned some impact of high oil prices.

Gotten cheaper

Fuel: Litre of petrol fuel (at local petrol station) is now Kshs. 92.7 (~$5.40 gallon) which is about 10% cheaper than the Kshs. 101.50 seen last time. While that is still higher than it was at the beginning of the year, and oil prices are down over 60% from the record highs of mid-2008, it is remarkable that for once fuel prices have reduced. In the past they have merely stagnated and oil companies, not passed on savings to consumers, but the threat of the government to regulate the prices, and a sustained media campaign (web/radio) has resulted in a slight reduction in petrol prices. (EDIT – A leading oil marketer – Shell announced today that prices will drop by Kshs. 15)

Entertainment: Bottle of Tusker beer (at local pub) is Kshs. 120 down from Kshs. 130 (cheaper by 8% from four months ago). Don’t know if this is one pub decision or the competition from new Summit beet launched by Keroche in October 2008 – the first true local competitor since (South African) Castle folded shop about six years ago. How will EABL fight back, and do they have to? Keroche got off to a good start but there has been little post launch marketing.

Communications: Continues to get cheaper as two mobile phone companies have become operational in the last quarter of the year – Orange (France Telkom) and Yu (Essar/Econet). The tone was set by Zain’s successful Vuka tariff, priced at Kshs. 8 per minute to call any network. Market leader Safaricom responded with Jibambie (up to a 63% discount) which enabled their subscribers to make calls at prices ranging from Kshs. 8 down to Kshs. 3 per minute if they bought a bigger denomination airtime voucher. The battle for subscribers is shifting now from voice calls which have reached unprecedented lows to data and money transfer where Safaricom is effectively Kenya’s largest ISP and money wallet.

No change: Electricity: My November KPLC bill is still Kshs. 1,900, same as it was in August, with a fuel surcharge reduction yet to be effected. High electricity prices have been a major cause for concern among Kenyan companies leading to President Kibaki to call for a reduction in the taxes levied on petrol prices and electricity.

But: Related: Is the quality of official statistics inflation data in question?
EDIT – Challenged by inflation, but with a view to improving liquidity, the Central Bank of Kenya today lowered the CBR rate (implied base rate) from 9 to 8.5% and also lowered the bank minimum cash ratio from 6 % to 5%