3G services now launched in Kenya by Telkom Kenya (Orange)
Telkom Kenya, the largest provider of integrated communications solutions in Kenya, has launched 3G services in Nairobi, Mombasa and Kisumu, providing subscribers with an internet speed of 21 Mbps. The service provider operating under the flagship of Orange plans to expand the service to other regions as well in order to cater to the ever increasing demand for data related services.
According to reports, Mickael Ghossein CEO Telkom Kenya states that a new internet era has begun where Orange will steadily take the lead in offering innovative products and services while providing simplicity through customer experience and maintaining value proposition to the customer. He also confirmed that users would be able to browse for as low as 0.40 cts per MB, with these rates being applicable across all its internet platforms.
Orange also unveiled a 3G shared broadband WIFI router which will allow upto 10 users to connect to the internet simultaneously, thus minimizing cost. As per reports, Ghossein stated that the service would be using multiple pole technology which separates voice and data channels, assuring users that the quality of data will remain unaffected even when there are multiple subscribers using voice services. This service also comes with parental control software enabling customers to manage internet abuse.
Telkom Kenya selects ZTE for 3G launch
Telkom Kenya, controlled by France Telecom’s Orange has stated that it has selected China’s ZTE Corp to launch its 3G network countrywide.
According to Telekom’s Chief Executive Mickael Ghossein, the company will invest US$46.56 million in the network to improve its market standing, and the service is expected to be up and running at the end of the first half of 2011. They expect the roll out to be complete by latest May, and the launch should be in June this year.
The company has 1,500 sites on 3G across East Africa’s biggest economy and stated its customers would enjoy speeds that could enable them download a song from the Internet in less than a minute.
Telkom aims to double its subscribers to about 4.6 million by year-end, in line with its overall goal to become the country’s No. 2 player by 2015 after market leader Safaricom.
The company acquired the 3G licence, the country’s third, for $10 million in November last year, after the country’s telecoms regulator reduced the price from $25 million.
Safaricom Kenya warns about damaging price war
Safaricom Kenya has warned that an on-going price war between the country’s mobile networks cripple the industry. Safaricom Chief Executive Bob Collymore stated that the price wars would cost the industry 320.58 million in revenue this year alone.
Telkom Kenya chief executive Mickael Ghossein had earlier in the week voiced similar concerns, saying with low profit margins, operators would not see the point in reinvesting in infrastructure to up quality.
The price war was sparked by Airtel, which recently took over the former Zain network and stated that it had doubled its subscriber base to 4 million in less than six months.
Collymore added that they believe the industry will lose revenues of between US$240-320 million as a result of this. Safaricom was unlikely to follow Airtel in cutting tariffs. That price is unsustainable, we are unlikely to move to that level because he had been charged with looking after the responsibilities of not just customers but also shareholders. He accused Airtel of putting Safaricom and the entire industry at risk through its strategy of offering calls at rock bottom rates.
Based on figures from last September – only a few weeks after the price cuts by Airtel – the Mobile World subscriber database reports that Safaricom is the market leader with a market share of 81% with Airtel (formerly Zain) coming in at 8.6%. Newer entrants, Econet had 7% of the market while Orange (Telecom Kenya) had 3.6% of the market.
Orange launches mobile banking service (Kenya)
Telkom Kenya has joined the bloom battle for control of mobile money with the launch of a mobile money service which will allow users to manage accounts held at Kenya’s Equity Bank from their handsets.
The prospective users of the new product known as Orange Money can request bank loans, make interbank money transfers, withdraw or send cash and pay bills all using their handsets.
According to the Equity’s Chief Executive James Mwangi, you now have your bank in your pocket. That is how easy banking is going to become.
Telkom Kenya, which retails as Orange, and controlled by France Telecom’s Orange, lags market leader Safaricom, which has the popular M-Pesa transfer service, and another by the local subsidiary of India’s Bharti Airtel.
As per the statements by the two companies, the service is mapped onto the customers’ bank accounts, making it possible for the customers to literally run their accounts from their mobile handsets, with the accounts’ security aligned to that of the bank.
Money transfer services, especially M-Pesa, are hugely popular in Kenya and have transformed how money moves around.
Many Kenyans who did not hold bank accounts can now access basic banking services from their handsets.
Safaricom full year profit jumps 44% (Africa)
www.WirelessFederation.com/news: A full year profit jump of 44% has been announced by Kenya’s largest mobile network operator by subscribers, Safaricom. The increase has been attributed to the rise in the revenue from data services including its mobile money transfer service MPESA.
The net income increased from KES10.5 billion a year earlier to KES15.15 billion (USD190 million) in the twelve months to March 31, 2010. 19% rise in the sales to KES83.96 billion has also been recorded.
Telkom Kenya, Zain and Essar Telecom Kenya are the main competitors of Safaricom in Africa, which is 40% owned by Vodafone. At the end of March it claimed 15.79 million customers.
Safaricom opposes Kenyan regulator’s competition rules
www.WirelessFederation.com/news: The new competition rules introduced by Kenyan regulators is said to be negatively affect the biggest mobile phone company of the country, Safaricom. The company feels that regulations of price control aims to specifically target Safaricom.
Safety from the abuse of market dominance is provided by the new rules and it will also enable the Communications Commission of Kenya to determine whether tariffs are anti-competitive.
According to Chief Executive Officer of Safaricom, Michael Joseph, if Safaricom wanted to it could go into this market and distort it completely but it has not abused its dominant position by going in there and undercutting everybody in the market.
However, other telecom operators in the country like Telkom Kenya Ltd., a unit of France Telecom SA, Zain Kenya Ltd. and Essar Telecom Kenya Ltd have come in support of the rule hailing it as an attempt to monitor market segments where there’s a monopolistic situation,†and not a form of price control.
3G roll out delayed to CCK failure to announce license fee (Kenya)
www.WirelessFederation.com/news: Communications Commission of Kenya (CCK) has been asked by mobile phone operators to announce the cost of the 3G licenses and the date for the allocation of the frequencies for 4G trials.
The rollout of faster internet connections across the country has been severely hampered due to the delay in licensing whereas the government has long pledged to issue guidelines on the fees involved.
According to Telkom Kenya chief executive Mickael Ghossein, his company has been asking the regulator to adjust the 3G license fee to make it easier for them to run competitive business.
France Telecom seeks USD385m from Kenyan government
www.WirelessFederation.com/news: The first phase of negotiations over France Telecom (FT) claim for KES28.9 billion (USD385 million) submitted to the Kenyan government has ended amid secrecy. Payment has been demanded by France Telecom following complaints about Kenya’s competitive environment and a scathing attack on the market dominance enjoyed by rival operator Safaricom.
Apart from the original claim of USD385 million, an additional claim of USD300 million has also been lodged by FT on the grounds that Telkom Kenya’s former management concluded a deal with equipment supplier Rapid Communications weeks before the French took over.
This denies FT chance to negotiate a deal under whose terms it would inherit future debts.
Kenyan operators outsource services to cut employee cost
www.WirelessFederation.com/news: The customer service and Network management operations of the telecom operators in Kenya are being outsourced in order to remain competitive in the long run. Following the footsteps of Telkom Kenya and Zain, Essar Telecom Kenya, operating under the Yu brand, announced an outsourcing agreement with Aegis.
In an effort to keep its employee costs low, the customer care services and Network management of Zain Kenya has been outsourced to Nokia Siemens while Telkom Kenya has outsourced its customer care operations to local BPOs Horizon and Kencall.
According to analysts, the initial focus for the firms was to grow their top lines, but now the executives are looking both at the top line and costs while the falling ARPU will put downward pressure on earnings growth. Incidentally, due to increased competition, ARPUs (average revenue per user) have declined significantly in recent years and it has resulted in reduction in mobile tariffs across the board.
Telkom Kenya shifts focus for 2010 following net loss
www.WirelessFederation.com/news: In an attempt to recover, following a net loss of KES10 billion (USD124.6 million) in 2009, Telkom Kenya has announced that it will shift its strategic focus in 2010. Revenue of KES11 billion was generated by the company but due to higher levels of competition it turned to net loss.
The profit level of the industry also plunged when the operators dropped their prices to gain market share.
According to Telkom Kenya CEO, Mickael Ghossein, the company had encountered severe conditions in the last trading year that had affected its ability to generate profits and so the company has turned its focus on providing quality services, innovating and providing value for money.
The company has also planned to move the market towards true broadband connectivity, offering speeds of up to 8Mbps.
