I | Emerging Telco Markets Series

For some peculiar reason the French seem to find East Africa pretty inhospitable, well that is probably restricted to the enterprise world as they do seem to enjoy themselves on safaris and other leisurely indulgences. Apart from La Farge which practically operates under a monopolistic facade of a free market, other French companies just don’t seem to have the right flavour of juice for this particular area.

There was Elf which was consumed by Total after restructuring its downstream business. Total in turn is just another under performing oil company whose share price bears sentiment to its limited profitability. Air France also pulled out of the market at a time when youthful middle eastern airlines saw opportunities to tap into the East and Central Africa market ferrying passengers to Europe, Asia, Australia and North America via their discrete desert hubs, Doha does not exactly bring out the zeal and glamour of Paris, but the business model works anyway.


The list will probably go on forever but our focus will be in the telecommunication industry. Vivendi pulled out of Kenya, selling out on Kencell sighting diminishing prospects which later bore fruit to Celtel Kenya. Well in a deal that surprised many France Telecom bought into Telkom Kenya amidst a rather opaque cloud surrounding the whole deal.


Well the adamant new entrants probably have a thing or two to learn from their comrades Vivendi who pulled out some years ago. At first glance they did look that they will live up to their Orange pomp and charm. That was the case then but a few months down the line, their presence is yet to be felt. We could give them the benefit of the doubt over the wave of political uncertainty that affected the Kenyan economy as a whole.


In a surprising move their primary focus has been towards pushing through the GSM front, Telkom Kenya already had a CDMA network which is expected to be re-branded and packaged as Orange with the new GSM provisioning in the pipeline. Huawei must be gutted after all the Chinese politicking seeing them being replaced as equipment vendors as France Telecom opted for Ericsson to supply them with GSM equipment. Such a choice in itself probably doesn’t make business sense unless Telkom plans to ditch its CDMA services which have accrued significant capital investment. What could have been more appropriate both on technical and business drivers would be Vanu which handles both CDMA and GSM on the same switch, using a technique called ‘soft switching’ which basically involves a computer handling calls rather than circuit electronics. Perhaps France Telecom has more compelling reasons other than just extending brotherly love to their European counterparts.


Unless Orange Kenya is spin out or freshly restructured then it will probably end up with loads of promise and little or no service usual of Telkom Kenya incompetence. The problem with Telkom Kenya is that of malignant cancer of mismanagement, efficiency is Greek to them, it just does not exist in their vocabulary. Most times one is better off struggling with poor services than convincing Telkom Kenya that your line has a problem, you will probably end up supporting their customer service agents than them supporting you, some just do not understand the technology behind the services they offer or probably there is only one person who does and he or she has been pinched by other service providers.


The bottom line, guaranteed service delivery and enhanced customer experience never have been the domain of Telkom Kenya. And probably the main cause for that has been of political appointment to its management and reverberant nepotism. A nincompoop would probably co-ordinate smoke signals in a village to some degree of effectiveness but that certainly does not work in a knowledge dependent 21st century communication and business.


And oh yeah, it was pretty ‘clever’ of them deciding to penetrate a market that is 80% controlled by an incumbent operator known as Safaricom, which at some point Telkom Kenya had or maybe still has shares in partnership with Vodafone. Such mazes and webs are pretty hard to figure out in developing countries like Kenya. Maybe terrestrial services would have been a better option since as a national operator it would probably carved out a significant portion of the cake and value added services backed by both local and international fibre interconnectivity would bring massive economies of scale, which can be passed on to the consumer and increase market penetration.

But that’s just maybe! And oh yeah, we hope Orange enjoys the safari with hyenas and all sorts of cannibals on the prowl!


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The French in Anglophone East Africa

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