| Slow subscriber growth hits Telkom Kenya | Send to a friend |
| Tuesday, 10 August 2010 21:50 |
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A stronger shilling and sluggish subscriber growth saw Telkom Kenya’s contribution to France Telecom — which has a 51 per cent stake in the firm — drop in the six months to June. Data from France Telecom indicates that Telkom Kenya’s revenues dropped from KSh5.5billion (Euro 53 million) to KSh5 billion (Euro 48 million). The French conglomerate said Telkom Kenya subscribers dropped from 545,000 to 460,000, indicating that gains made last year had been reversed. Analysts said forex exchange fluctuations linked to the euro might have contributed to the results. The currency traded at KSh99 against the shilling in June compared to KSh107 to one Euro in the same period last year. This means that the firm lost 7.4 per cent or KSh7.40 for every KSh100 it earned, when shillings were converted to euros. Currency dealers attribute the weakening of the euro against the local currency in the first half of 2010 to the strengthening of the dollar against the European currency as fears over the financial health of the euro zone economy prompted investors to hold on to the dollar. The firm’s subscriber growth has trailed its peers — Safaricom, Zain and Essar — as the battle to grow and defend market share continues to intensify. The company is banking on rethinking its product line, investing more in infrastructure, and rejuvenating its dealer network to restore its position in the market. A key component of the company’s strategy is likely to hinge on the development of a competitive offering in the mobile data sector. Mickael Ghossein, Telkom Kenya’s CEO, recently said the company was ready to launch 3G services in the fourth quarter of the year and 4G services later. 3G services would allow Telkom Kenya subscribers to access faster internet services on their phones, translating to more revenue. “Telkom Kenya is ready to launch 3G services in the fourth quarter of the year. We have had successful tests in strategic areas of the country and as soon as we get the frequencies we will start deploying the requisite technology that will see us roll out faster and enhanced data services,” said Mr Ghossein. In June, the company was handed a reprieve after the government announced that it would lower the cost of 3G licenses to $10 million, down from the $25 million previously charged. This week, it emerged that the company’s deputy managing director Peter Reinartz had moved to multimedia operator Wananchi Group, paving the way for fresh realignment in the company’s executive suite. Add this page to your favorite Social Bookmarking websites           |
