Kenya News

Telkom Kenya to unveil mobile service this week

noreply@blogger.com (Mwananchi) — Tue, 16 Sep 2008 11:38:51 -0500

By James Ratemo

The stage set for stiff competition in the telecommunications sector this week as Telkom Kenya officially unveils its mobile telephone service.

The company becomes the fourth entrant into the cellular sub-sector after the two well-established players, Safaricom, Zain and another newcomer, Econet Wireless.

With a war chest of more than Sh8 billion, the company will rollout the network in Mombasa and Nairobi, but will eventually cover the whole country.

In an exclusive interview with The Standard on Monday, Telkom Kenya CEO Dominique Saint Jean promised to give his competitors a run for their money with affordable cross network tariff rates alongside its other services.

firm’s services

"Telkom Kenya offers a fixed wireless service using CDMA technology, our entry into Global System for Mobile (GSM) will boost our profile in the cellular market and we are lucky since we will benefit from the latest technology," said Jean. The company, the former sole fixed line operator, is also set to unveil its commercial brand this week.

"We will address all segments in the market and we are signing network interconnection agreements with other GSM cellular operators. From our GSM and CDMA network, calling across networks will be cheaper as compared to other operators," he said.

The fixed-line operator applied for the mobile licence last year and went on to sign an agreement with Ericsson, the Swedish telecommunications giant, as the sole equipment supplier for its ambitious GSM network.

"This new venture reflects a strong commitment by Telkom Kenya to deliver superior communication experience to customers and will pave way for healthy competition in the cellular market. We will focus on quality service in order to survive the anticipated stiff competition," said Jean.

labour force

A latecomer in a market that is already crowded, Jean said, the company has a lean labour force of 3,000 employees down from 17,000 a year ago and 6,000 in December.

"We will retain our landline network especially in the rural areas where majority of low income earners live and in urban centres where there is no vandalism," he said.

"We believe there is strong demand for GSM, fixed line and broadband offered as one package."

CCK approves Econet’s proposal to offer 3G services

noreply@blogger.com (Mwananchi) — Tue, 16 Sep 2008 11:35:22 -0500

By James Anyanzwa

The Communication Commission of Kenya has approved Econet Wireless Kenya’s proposal to offer 3G services.

The industry regulator allocated a 3G Spectrum to Kenya’s third mobile operator, putting the firm in a position to unveil 3G services as part of it rollout later this year.

The 3G technology will initially be available in Nairobi and its environs. "3G technology is designed to enable mobile operators offer its users a wide range of more advanced services including high speed data, while achieving greater network capacity though improved spectral efficiency," Mr Michael Foley, the firm’s managing director said in a statement.

diversified service

He said the 3G license is a milestone that would enable EWK offer a diversified service beyond the traditional mobile voice service.

"We intend to have a well managed and reasonably priced package for our customers," he said. The 3G technology include wide area wireless voice telephony, video calls and broadband wireless data.

Foley said subscribers would enjoy access to high-speed data at superior speeds. He said subscribers would need to acquire 3G enabled handsets in order to enjoy mobile broadband services including Internet access, email communication, access to calendars and other multimedia services.

He said PC users would, however, access the service using either broadband modem plugged into a computer to access the internet for a single user or a broadband wireless router that allows a group of users high-speed access to the internet.

internet service

The service enables robust and high-speed broadband Internet services whether mobile or in a fixed office environment. Foley said enhanced 3G network would eliminate challenges of limited fixed network infrastructure and expensive internet access alternatives.

Indian oil firm wins refinery’s 25pc sale offer

noreply@blogger.com (Mwananchi) — Tue, 19 Feb 2008 10:17:10 -0600

By James Anyanzwa

Indian oil giant, Essar Energy Overseas Ltd, has won the bid to acquire 25 per cent stake of the Mombasa-based Kenya Petroleum Refinery Ltd.

The strategic acquisition follows floatation of part of KPRL shareholding by oil marketers.

Shell Petroleum Company Ltd, BP Africa Ltd and Chevron Global Energy Inc own 50 per cent of KPRL, while the Government owns the remaining half.

The purchase transaction will be completed in the next six months.

"We are now working with Essar. Our expectations are that the transaction should be completed by August 2008," Mr Mwaura Ngaari, the Kenya Shell Company external affairs manager told The Standard on Monday, while confirming the sale-purchase agreement.

Ngaari, however, did not disclose the price paid for the stake citing confidentiality clause of the deal.

However, Essar will spend close to Sh32.4 billion (between $400-$450 million) to upgrade the refinery by adding secondary units.

"There are many things we need to finalise. The deal is very complex," said Ngaari.

Essar Energy Overseas Ltd, a subsidiary of Essar Oil Ltd, becomes the first Indian company to buy a stake in an overseas refinery.

The company won the bid after defeating, among others, Reliance Industries — also from India — and Libya Oil Kenya.

The acquisition is expected to fit into Essar’s strategy of achieving refining capacity of one million barrels per day.

The Government holds 50 per cent of KPRL and has a pre-emption right over the sale fronted by the oil marketers. It’s, however, not clear whether it would exercise its rights considering that it also plans to offload its shares under ongoing privatisation programme.

The four million-tonne refinery is the only facility in East African region and produces gasoline, diesel, kerosene and fuel oil.

"The refinery offers lot of opportunity since it is the only refinery in the region and caters for the surrounding market," Mr Naresh Nayyar, the chief executive of Essar Energy Holdings Ltd was recently quoted by the Indian media.

KPRL’s products are exported to DRC, Uganda, Burundi and Rwanda.

Demand for petroleum products in these markets is estimated at five million tonnes.

Essar already has three exploration and production blocks in Madagascar and one in Nigeria.

A successful acquisition was to allow Reliance, India‘s biggest private sector company with a market value of more then $67 billion, to source petroleum products for selling to European and American markets.

Reliance operates a refinery in the western Indian state of Gujarat and its subsidiary Reliance Petroleum, in which Chevron holds five per cent, is building a new unit nearby.

Its entry, however, has been temporarily scuttled by the emergence of Essar.

KPRL uses crude oil from the West Asia and transports it by sea to Kipevu Oil Jetty in Kilindini Harbour (three km from the complex at Changamwe) for processing. The refined products are then carried by pipeline to markets locally and in the region.

Laying of marine cable set to begin

noreply@blogger.com (Mwananchi) — Thu, 10 Jan 2008 07:16:51 -0600

By Alari Alare

Construction of the East Africa Marine System (Teams) undersea fibre optic cable begins next week.

The Teams cable, which will link the Kenyan coast with the rest of the world, will be built by a French company, Alcatel-Lucent at a cost of $82 million.

Information and Communication minister, Mr Samuel Poghisio, said that laying of the 4,500km cable will start in Fujairah in the United Arabs Emirates and is expected to reach Mombasa by the second quarter of next year.

"I have noted that the ministry is undertaking laying of the fibre optic cable," said Poghisio while taking over office from his predecessor, Mr Mutahi Kagwe. He said the cable would bring down communication costs.

The cable will be a one-fibre pair initially equipped with 40 gigabytes but can be upgraded to 640 gigabytes. It will compete with two other cables — the Eastern Africa Submarine System (Eassy) and the Sea Cable System (Seacom) — both set to link southern and eastern Africa with the rest of the world.

While Teams will run from Mombasa to Fujairah, Eassy is designed to run from Port Mtunzini, near Durban in South Africa, via Dar es Salaam, Mombasa, Mogadishu through to Port Sudan.

Seacom on the other hand will run from Mtunzini in South Africa, to Mumbai in India and Marseille in France via Mozambique, Madagascar, Kenya and Tanzania.

Teams will provide affordable international broadband connectivity to Kenya and the Great Lakes region. It will slash bandwidth costs to $400 per megabyte, from between $6,500 and $7,500.

By the time Teams lands in Mombasa, the Government will have completed laying of the terrestrial fibre in the country under the Fibre Optic National Network (Fonn) project set to cover 4,300km.

Poghisio’s disclosure comes a few weeks after the Government announced ceding 20 per cent more shares in the Teams project to private investors.

The Government had initially owned 40 per cent of the cable but demand from the private sector for shareholding forced it to cede half of its ownership.

Last month, the Permanent Secretary in the same ministry, Dr Bitange Ndemo, said demand for capacity from the cable was high.

In the Fonn project, 1,800km of terrestrial cable will run through North Eastern and the Coastal region. It will be constructed by French company, Sagem. The other fibre running through Central Kenya 1,100km will be laid by a Chinese company, Huawei, while the third one estimated to cover 1,400km will be constructed by ZTN also a Chinese firm.

Work on Sea Cable begins

noreply@blogger.com (Mwananchi) — Mon, 17 Dec 2007 10:59:30 -0600

By Alari Alare

Construction of the Sea Cable System (Seacom) will link southern and eastern Africa with the rest of the World has started.

The 15,000 km cable, expected to provide 1.28 terabits per second of broadband capacity, will run from Mtunzini, near Durban in South Africa, to Mumbai in India and Marseille in France via Mozambique, Madagascar, Tanzania and Kenya.

The Aga Khan Fund for Economic Development (Akfed) through the Industrial Promotion Service (IPS) is one of the cables’ equity owners.

The marine cable will compete with The East African Marine System (Teams) fronted by the Government of Kenya and the Eastern Africa Submarine System (Eassy). Construction work for the two cables is expected to start next month.

A statement released by Seacom on Thursday, said the cable will be completed by June 2009. The construction work, which started on Monday, is being done by Tyco Telecommunications.

"The launch of construction marks a significant moment for our industry as we begin the first major submarine cable infrastructure system to link East and South Africa with India, the Middle East and Europe," said Mr Michael Rieger, vice president, sales, marketing and project management, Tyco Telecommunications.

The cable will provide inexpensive bandwidth, removing the international infrastructure bottleneck and supporting East and South African economic growth.

"The overwhelming demand for increased bandwidth in East and South Africa grows greater each day," said Mr Brian Herlihy, President, Seacom Ltd.

"The Sea Cable System is making massive new bandwidth available, enabling communication prices to come down dramatically ," said Herlihy.

The cable will be ready to serve Southern and East African markets from 2009, well in time to meet the bandwidth needs of the Confederations Cup and the 2010 Soccer World Cup in South Africa, and the growing requirements of the countries it will serve.

The financing structure of the $650 million (Sh43.6 billion) project has been divided into three parts: equity, debt financing and co-building arrangements.

Akfed has invested $75 million for 25 per cent equity in the cable. Financing through equity will account for $225 million while the debt part will account for $75 million.

The remaining $350 million will be met through a co-building financial arrangement with Telecom Egypt and India’s VSNL.

Airline plans 17 weekly flights to Nairobi

noreply@blogger.com (Mwananchi) — Mon, 03 Sep 2007 10:59:04 -0500

By Chris Mburu

Emirates Airlines has notified Kenyan aviation authorities plans to introduce extra three weekly flights from Dubai to Nairobi.

The Middle East Carrier operates a daily evening and day flight to Nairobi, and the new flights would raise the weekly schedules to 17 per week.

But, plans to introduce Dubai-Mombasa flights have been suspended.

The new flights make Emirates the leading foreign operator to Jomo Kenyatta International Airport and marks the continued dominance of the airline on Kenya to Middle East routes. Kenya Airways operates a daily flight to Dubai.

Emirates General Manager for East Africa, Mr Ali Al Shamsi, says arrival and departure times of the new flights will be announced later. "We are yet to decide whether to operate the new flights directly or to mount a joint operation through Kampala and Dar es Salaam," he said.

Aviation officials at the Ministry of Transport and Kenya Civil Aviation Authority say the current Bilateral Air Service Agreement between Dubai and Kenya allows for unlimited number of frequencies between Nairobi and Dubai.

Emirates has been flying to Kenya for the last 12 years.

"Outbound load factors from Nairobi are extremely healthy. From three flights a week some years ago, Emirates today enjoys a double daily service between Nairobi and Dubai," he said.

Uganda and Tanzania each have a daily, direct service from Dubai, up from four flights a week four years ago.

"On these routes we operate the Airbus A330-200 aircraft with industry leading features. Last year we registered a 50 per cent revenue growth on our Dar-es-Salaam route and a 40 per cent increase in Entebbe services," Al Shamshi said in an interview.

In October 2004, the airline started a once a weekly freighter service from Nairobi to Amsterdam via Dubai using a Boeing 747-400F offering 110 tonnes of cargo capacity.

The service - Emirates SkyCargo’s first African freighter route – was increased to twice weekly because of increased demand.

"Kenya is the world’s leading horticulture producer, particularly for cut-flowers. Emirates believes that the load factors will continue to grow over time as the potential of East African economies maintain an upswing. We look at Kenya as a high potential area for both passenger and cargo traffic," Al Shamshi said.

KenGen rules out power rationing as it increases energy production

noreply@blogger.com (Mwananchi) — Mon, 03 Sep 2007 10:54:13 -0500

By Mangoa Mosota

There would be no power rationing, at least not this year, the Kenya Electricity Generating Company (KenGen) has said.

KenGen Managing Director, Mr Eddy Njoroge, said over the weekend adequate measures had been taken to avoid a power rationing programme.

"I don’t foresee us resorting to power rationing, although the reserve margin is small," he said.

Njoroge was speaking at the weekend in Nyando, during the initial water filling ceremony at the intake of Sondu Miriu project.

He said KenGen has set a five-year ambitious plan to produce 500MW.

Njoroge said the target will be achieved through a number of hydropower and geothermal projects currently under construction.

He said the demand for power in the country would exceed 1800MW by the year 1012.

"We will work to ensure that we surpass this demand to ensure the reserve margin is adequate," said Njoroge.

He added that the current demand stands at1010 MW, but is expected to rise significantly in the next five years.

Njoroge, however, said most of the projects were behind schedule due to the rigorous procedures set by donors.

"We plan to complete many of our projects within three years, but conditions set by donors delay disbursement of funds," he said.

Njoroge said the company will undertake a three-year project at Sang’oro, Nyando District expected to add 20 MW to the National Grid.

The project will be funded by Japan Bank for International Corporation (JBIC) to a tune of Sh3.3 billion.

"Tendering will be done on Monday and bids will be submitted by December," he said.

He said construction work is earmarked to start in April, next year.

Njoroge said the Sondu Miriu Hydro Power Project which will be completed by November, will add 60 MW to the National Grid.

The project was funded by Japan at a cost of over Sh10 billion.

However, the cost of the project has exceeded the initial allocation as it stalled for four years.

He said Olkaria II, third machine Geothermal Power Plant will be constructed by Mitsubishi Corporation at a cost of Sh6.5 billion.

He said the World Bank, European Investment Bank and French Development Agency (AFD) will jointly fund the project.

"The three-year construction work will commence in a month’s time," he said.

He added that six geothermal wells are being drilled by Great Wall Drilling Company from China, and will be competed in the next one year and at a cost Sh1.6 billion.

Kenya currently produces 130MW of power from geothermal sources in three sites on the floor of the Rift Valley, which KenGen says has potential to produce 2,000MW.

Njoroge said KenGen would rehabilitate Kiambere hydropower at Tana River to produce an additional 20MW.

Njoroge was accompanied by the company’s chairman,

Mr Titus Mbathi and other directors, the chairman of the Lake Basin Development Authority, Mr Zablon Olang’, Nyanza PC, Mr Paul Olando and PPO, Ms Grace Kaindi also accompanied him.

KenGen, which is quoted at the Nairobi Stock Exchange, is the leading electric power generation company in the country, producing about 80 per cent of electricity.

Public endorses Tarda, Mumias sugar plant

noreply@blogger.com (Mwananchi) — Mon, 27 Aug 2007 11:32:18 -0500

By Standard Reporter

Mumias Sugar Company has moved a step closer to realising its dream of setting up a state-of-the-art sugar factory in the Tana Delta in Tana River District.

Ongoing public hearings, which kicked off last week, saw local people endorse the project. They complained it was taking too long to get going and then gave their conditions for their acceptance of it.

Leading the local people with an endorsement of the proposed factory, complete with an expansive nucleus estate was Assistant Minister Mr Danson Mungatana.

Mungatana told the public hearings that land totalling 200,000 hectares had been set aside at the ADC’s Galana Ranch for the local pastoralist community to give pasture and water for their animals.

A major criticism levelled against Mumias has been that the factory’s 20,000-hectare nucleus estate will deprive the pastoralists of land for pasture and water for their animals and therefore strangle them economically.

While Mungatana described the proposed factory as godsend, he warned: "We will give you total support but we want the company to be known as Tana River Sugar Company Ltd and in which local people will be allowed to own shares."

Most of the people who aired their views in the public hearings in Ngao, Garsen, Kipini and Witu which is in Lamu District, urged Mumias Sugar and the Tana and Athi Rivers Development Authority to train local people in the running and management of sugar mills.

They complained that employment was a major challenge in the area and expressed optimism that the sugar factory and its nucleus estate would play a significant role in alleviating this and other challenges in Tana River District.

There was a word of caution here, too: "We don’t want the company (Mumias Sugar) to hire other people while we have well-educated people as has happened with previous projects. Hire our people," said an elder, Mr Ali Dhadhu.

Mr Aggrey Wanjala, the Mumias Sugar Company chief who is in charge of project implementation at Tana River, assured the local people that the company would work closely with them and take a leading role in addressing the challenges facing them.

Mumias Sugar officials say that when operational, the factory will have a power generation plant and employ directly and indirectly an estimated 30,000 people.

They told the public hearings that the feasibility and environment impact assessment studies for the sugar project are at an advanced stage.

The hearings are part of a sensitisation and consultation process Mumias Sugar has been carrying out to get the local peoples’ buy-in ahead of the project’s commencement.

State reclaims Ramisi sugar property

noreply@blogger.com (Mwananchi) — Mon, 27 Aug 2007 11:29:49 -0500

By Philip Mwakio

The Government has invoked the compulsory acquisition clause and seized the Ramisi Sugar Factory land that changed ownership soon after its collapse in the 80s.

This is ahead of its intended revival after a series of unfulfilled promises by the previous Government.

Lands minister Prof Kivutha Kibwana said Sh64 million had already been paid out as compensation to a financial institution that had taken over the land after the original owners had defaulted in servicing a loan it had acquired.

A new strategic investor in the factory project — yet to be identified — will be allocated 15,000 acres while an additional 8,000 acres will be hived out to outgrowers. Firms from Karachi, Pakistan, have shown interest in the project, but are demanding to start factory with nucleus farm.

Associated Sugar Company, which is owned the Ramisi Sugar Factory, had taken a Sh300 million loan from Bank of India before it defaulted on repayment. The land held as collateral by was taken over by the bank.

Addressing landowners in Ramisi in Kwale District, Kibwana said sugar cane farming will commence soon after a strategic investor to revive the factory is identified.

Ramisi Sugar Factory was founded on a parcel of land in 1927 and was run by the Madvhani Group from 1947 to 1987 when it collapsed. It employed over 3,000 workers and operated on land measuring 45,000 acres, offering support to 4,000 famillies who relied on cane farming.

A farmer in the area, Mr David Ndirangu, said the revival of Ramisi was long overdue.

"While the Government has moved to bail out Muhoroni, Chemelil and Miwani Sugar Factories that at one time were facing imminent collapse, Ramisi was left out,’’ he said.

New investment banker licensed

noreply@blogger.com (Mwananchi) — Wed, 08 Aug 2007 11:24:45 -0500

By Tom Mogusu

Renaissance Capital (Kenya) has been granted a licence by the Capital Markets Authority (CMA) to set up investment banking operations in Kenya.

The announcement means that the firm joins seven other companies that have so far been licenced by the CMA to carry out investment banking business.

The firm has also hired Mr Maina Mwangi from Standard Bank, South Africa, to be in charge of its investment banking business in Kenya. "We think Kenya is on a long term convergence curve," Mr Stephen Jennings, CEO of the Group said.

Reinassance will also apply to become a member of the Nairobi Stock Exchange (NSE). The NSE is reported to have set the reserve price for the prestigious position at Sh150 million, though it is also holding out for bids in the region of Sh300 million for the two positions that are now vacant.

The winner will join an exclusive club of 18 stockbrokers who last year shared an estimated Sh4 billion at a time when the market was going through one of its biggest boom in recent years.

Renaissance group’s commitment to invest US$1 billion into Africa is on track and should be completed in 2008, Jennings said.

"We are seeing what happened in Asia being replicated here in Kenya. We hope to play a bigger role in the growth of this economy in the long term".

The CEO said the firm is angling for key businesses in financial services, telecommunications, consumer services and infrastructure.

"We are looking at industries that are long term by nature because we are here for a long term regardless of what happens over the next 15 years," he said.

Mr Amish Gupta, the Director Renaissance Capital Kenya Limited, said the firm’s Investment banking licence had been given in record time, an indication that the CMA is committed to deepening the capital markets in Kenya.

Telkom to lay off 4,400 staff, and tackle Sh69b debt

noreply@blogger.com (Mwananchi) — Wed, 08 Aug 2007 11:19:22 -0500

By John Oyuke

Telkom Kenya plans major debt and project swaps to rid it of liabilities amounting to Sh68.8 billion as part of restructuring before privatisation.

The parastatal says it has finalised plans to lay off a further 4,421 employees as part of the process before the end of this year.

Managing director, Mr Sammy Kirui said Phase III of staff rationalisation, whose criteria has been defined by an external human resources consultants, Pricewaterhousecoopers, is scheduled to be completed by the end of September 2007 at an estimated cost of Sh3.8 billion.

Chief Finance Officer, Mr David Muriithi said Telkom Kenya is determined to have a debt-free balance sheet before the entry of a strategic investor with the expectation that this will increase the company’s value.

"As a consideration of the acquisition (transfer) of the 60 per cent shareholding held by Telkom in Safaricom, the Government will support the funding and swapping of various liabilities and projects in Telkom Kenya," he said.

They were speaking during the ongoing Telkom Kenya Privatisation Bidders Conference in Nairobi.

Funds available

Mr Solomon Kitungu, Director of Reforms in the Ministry of Finance, said the Government has already factored the funding initiatives in the current budget, with Sh41 billion made available towards the process.

Seven bidders have shown interest in the Telkom privatisation, which would see the Government sell 51 per cent of its interest in the utility.

The firms are British Telecom, France Telkom, and Reliance Communications, Tata Holding and MTNL, all of India, Alcazaar of Kuwait and Telkom SA.

Muriithi said support from the Government as a result of the unbundling of Safaricom will come in form of cash injections and debt swaps.

This, he pointed out, would help Telkom deal with issues of tax liabilities, pension fund deficit, staff restructuring, loans and Government debtor balances, new Telkom mobile licenses and bridging finances.

In clearing its liabilities, Telkom Kenya would have to pay Kenya Revenue Authority (KRA) Sh36.3 billion in principal tax of Sh15.4 billion and outstanding interest and penalties on tax amounting to Sh20.9 billion.

It would also need to settle a pension liability of estimated at approximately Sh10 billion and repay bridging finance – phase II of Sh5.8 billion. Other liabilities include retrenchment phase III financing of Sh3.8 billion, Safaricom loan principal Sh2.2 billion ($33m) plus interest of Sh3.8 billion.

This in addition to Safaricom interconnection interest of Sh1.3 billion, Paris Club and other loans paid by Government amounting to Sh3.8 billion. There is also the Government debt on telephone and data lines amounting to Sh3.4 billion, new mobile license (US$55m), which requires Sh3.9 billion and liquidity and investment support of Sh3.5 billion.

IFC pledges to invest Sh2 billion in cable project

noreply@blogger.com (Mwananchi) — Tue, 07 Aug 2007 11:34:26 -0500

By Alari Alare

The World Bank’s private financing arm is set to invest Sh2.1 billion ($32.5 million) in the East African Submarine Cable System (Eassy).

The money will be chanelled from the International Finance Corporation (IFC) through the West Indian Ocean Cable Company as a $18.2 million senior loan and a $14.5 million standby loan. WIOCC is a Mauritius-registered special purpose vehicle created to raise funding for Eassy.

The cable is a landmark fiber-optic cable project set to connect 21 African countries to each other and the rest of the world with high-quality Internet and international communications services.

The total cost of its construction is estimated at $235 million (Sh16 billion). Other financing is expected to come from private operators and development institutions.

Eassy is a partnership among 26 telecommunications operators, the majority of which are African firms. The cable is expected to transform the telecommunications landscape in the region as it improves access for 250 million Africans and substantially reduces costs for consumers and businesses. Construction is expected to begin by the end of year, with the cable fully operational by the beginning of 2009.

To expand the benefits of the new cable and stimulate traffic, IFC is coordinating its efforts with the World Bank, which is financing a complementary system of terrestrial backhaul and backbone networks through the Regional Communications Infrastructure Programme.

"The Eassy cable will complete Africa’s integration into the global communications network, with significant development impact for the people of East Africa and the larger region," said IFC Executive Vice President and Chief Executive Officer, Mr Lars Thunell.

The IFC’s annual investments in sub-Saharan Africa have doubled this year to a record $1.4 billion from $700 million previously.

Consumers along the east coast of Africa typically pay between Sh13,400 ($200) and Sh20,100 ($300) a month for Internet access. These prices, some of the world’s highest, have an adverse economic impact.

Fibre optic project shifts gear

noreply@blogger.com (Mwananchi) — Fri, 30 Mar 2007 12:22:40 -0500

By Philip Mwakio

The fibre optic sub-marine cable project spearheaded by the Government has gone a notch higher following the completion of a route survey.The East Africa Marine Systems (Teams) undersea cable should be operational in three years, Information and Communications Permanent Secretary, Dr Bitange Ndemo has said.

"This occasion marks a momentous milestone for Telkom Kenya and the country at large as it takes us nearer to our cherished dream of commissioning a fibre optic backbone network in the next three years," he said. Ndemo spoke on Thursday when he received a route survey report presented to him by the project scientists, whose ship docked at the port of Mombasa.

The survey started in Fujaira in the United Arab Emirates (UAE) and ended in Mombasa, covering a distance of 4,726 km, said project manager, Mr Boris Shirokozhukhov.

Cruising at a speed of eight knots, the ship took three months to complete the route.

Ndemo added that the deployment of a high bandwidth fibre optic backbone network under the Teams initiative was an achievable feat.

Tendering to start

Following the route survey completion, the Government is now on course to establishing a separate company — special purpose vehicle — to manage laying of the cable, linking Fujaira and East Africa.

RV Gelendzhik, operated by Tyco Telecom Company of the US undertook the survey and mapping services to facilitate laying the cable to link the three East African countries.

On board was a crew of 30, including 22 scientists and two Telkom Kenya officers.

The PS termed the survey completion as a milestone that would further advance local telecommunication standards.

The survey project costed $2.7 million (Sh191 million).

Immediately the report was received, concerned authorities announced they would work on the modalities for tendering.

Team’s chairperson in charge of the Technical Committee, Projects and Contracts, Ms Atieno Ochola, said they are now working on the design of request for proposals.

"The survey forms portion of the project and what we are awaiting is the actual construction or laying of the cable under the seabed," she said.

A landing base has been identified near the historical Fort Jesus Museum, overlooking the Indian Ocean.

Alongside other investors, the Government is expected to own 40 per cent of the project.

Standard Chartered Bank is the project’s financial adviser and was represented at the ceremony to welcome the ship by Mr Fred Michuki, a senior lender, public sector.

Last year, the Government, through Telkom Kenya and the UAE, through its telecommunication service provider Etisalat, entered into a memorandum of understanding for implementing Teams.

Other top officials at the function included Communications Commission of Kenya Director General, Mr John Waweru, Mombasa District Commissioner, Mr Raphael Letimalo, Telkom Kenya Coast Regional Manager, Mr David Molel and Kenya Ports Authority Harbour master, Mr Twalib Khamis.

Reliance gets shot at SNO licence deal

noreply@blogger.com (Mwananchi) — Wed, 07 Feb 2007 12:14:12 -0600

By John Oyuke and Reuters

The Communications Commission of Kenya (CCK) has cancelled the tender for a second national operator (SNO) awarded to the Vtel Consortium.

Commissioner General, Mr John Waweru on Friday said wrangling between Dubai-based Palestinian firm Vtel Holdings and local partners had stopped the group from meeting its commitments.

"The commission board has resolved to cancel the tender... on the basis of non-compliance with the tender requirements, and to invite the next highest-ranked bidder Reliance to apply," Waweru told a press conference.

Waweru said the Reliance Consortium had a week to apply for the SNO licence after which the commission would re-issue the tender.

The Reliance Consortium is led by India’s largest private telecom service provider, Reliance Telecoms, and Kenya’s Triton Group with Swedtel of Sweden as the technical partner.

Reliance Telecoms is the parent company of Flag Telecom, an undersea cable operator that has teamed up with Kenya Data Networks to connect Mombasa to the UAE.

Waweru said that the Vtel consortium had failed to apply for the licence as required under the tender rules by the expiry of the last deadline — 4pm on January 24. The group had been given three deadline extensions but failed to make an application each time. Once Vtel Holdings wrote to the CCK saying it was trying to replace its local partners.

Waweru added that the tender rules document authorised the Commission to call the bid bond and choose the next highest ranked bidder based on the financial offer. The Commission, he pointed out had already notified both the Vtel and Reliance consortia of the new development in the SNO deal.

Triton, the local investor in Reliance, said the consortium needed to discuss whether it could raise the money.

"We have full intentions of taking up the offer," Mr Yagnesh Devani, Triton’s executive chairman, told Reuters.

Waweru said Reliance would be expected to increase their bid to match that was made by Vtel Consortium and has up mid next week to express their willingness to take up the offer.

Vtel had quoted a financial bid of $169.7 million (Sh12 billion) winning out against Reliance, which bid $111 million (Sh7.7 billion), and India’s Mahanagar Telephone Limited at $ 52.1 million (Sh3.6 billion). They won a lucrative unified licence that allows them to provide national mobile telephony, Internet backbone, international voice gateway, commercial VSAT and long-distance voice data services.

Waweru said the decision to invite Reliance to apply for the licence was driven by an overriding commitment to adhere by the SNO tender document.

He however, said should the Reliance Consortium be unable to raise their bid or fail to express interest in taking up the new offer, for whatever reason, CCK would have no choice but to re-tender for SNO.

This time though, he added, tender rules would be relaxed featuring among others, the possible dropping the 30 per cent shareholding commitment by foreign investors before a licence is issued.

Flag Telecom recently announced it will build a cable linking South Africa to Kenya via Mozambique, Tanzania, Madagascar and Mauritius as part of a plan to revamp its global network by the end of 2009.

Analysts say the country’s investment rules, such as one that requires foreign companies operating in the country to have an at least 30 per cent local shareholding, were too rigid.

"We’re going to explore options for making it easier for foreign investors to come in. We’re prepared to advise the country to change or relax some rules," Waweru said.

Once operational, the winner of the licence will compete for the land-line market with the state-run Telkom Kenya, whose services, customers say, are expensive and unreliable. In the mobile business the SNO’s competition will be Safaricom, a joint venture between Telkom Kenya and Britain’s Vodafone, and Celtel, a subsidiary of Africa’s third-ranked cell phone company. A third mobile phone company, Johannesburg-based Econet Wireless, is yet to start operations due partly to infighting with its local shareholders and a litany of court cases.

State to change 30 per cent rule

noreply@blogger.com (Mwananchi) — Thu, 25 Jan 2007 20:21:13 -0600

By John Oyuke

Information and Communications Permanent Secretary, Dr Bitange Ndemo says work has been continuing to address many of the impediments to investment in ICT. File picture
Potential foreign investors in the telecommunications sector will soon have up to five years to find satisfactory local partners with whom to develop successful ventures.

The Government is planning major structural re-arrangements for attracting foreign investment in the sector. One of these is relaxation of the rule requiring that foreign companies investing in the local telecommunications sector must allocate 30 per cent shares to Kenyans.

The move comes against the background of an ambitious declaration that 2007 is going to be year of real results in the wider Information and Communications Technology (ICT) industry.

Growth in outsourcing business

Information and Communications Permanent Secretary, Dr Bitange Ndemo said the ministry spent a full year laying the groundwork and it is now time for Kenyans to see results. He said Kenyans were likely this year to see remarkable growth in the outsourcing business with increasing numbers of them getting into it, more products and more employment in the sector.

"We pray that the ICT Bill goes through (Parliament)," Ndemo told FS last week. "If it does, we would be home and dry to do a lot of things that we need to do. So you are bound to see more activities this year than last year."

And having closed the door on negotiating the sale of a further nine per cent stake in Safaricom to Vodafone Plc, Bitange also says the government is studying the local capital markets, with a view to floating the planned Safaricom public offer within the year.

Wrangles threatening e-economy

Ndemo said decision to relax the 30 per cent local stake rule was key to giving more time to potential investors to find local partners that they were happy and can work with. It would also significantly reduce current wrangles threatening to hold back the process of liberalising the sector and development of an e-economy and information society.

"It would no longer be mandatory for a foreign investor to have a local partner until after five years," he said.

He said should the foreign company get an agreeable local partner before they are licensed, that would be fine with the government but the requirement would no longer be something to hold back much needed foreign direct investments.

"What we are saying is that a foreign investor needs time to (get to) know whom he can work with," Ndemo says. "In three years he can do a private placement or in five years do an IPO (initial public offering) or introduce employee option plans, but they must give 30 per cent to locals."

Ndemo said what is happening in the country currently is that a number of people run around telling foreign investors they could help them here and there and then bringing problems to the country, as they cannot raise the money.

Local telecommunications sector insiders say the origins of the problems shaped by the local equity threshold started from a policy statement introduced by the government in 1997.

The Postal Telecommunications Sector Policy Statement, published in November of that year spelt out a new structure for the industry. Specifically, the document stipulated, "any company licensed to provide telecommunications services in the liberalised market should have at least 70 per cent of its equity owned by Kenyans."

In subsequent years, and to make the regime friendlier to foreign investors, the rule was revised to 60 per cent for foreigners and 40 for locals. In the year 2002, the then Minister for Information and Telecommunications Mr Musalia Mudavadi published a gazette notice in which he changed the equity threshold to 70 per cent for foreign investors and a minimum of 30 per cent for locals.

Ndemo told FS that a review of this rule was key if the country is to avoid numerous problems it has had in attracting major foreign companies into the telecoms sector.

Fibre optic to rollout soon

"We have had problems in the past where foreign companies have attempted to invest in the sector without success and if this situation stayed we will continue having the same problems," he said.

Ndemo also promised Kenyans a lot of activities beginning January 26 in the laying out of undersea fibre optic cables to back up the ongoing terrestrial fibre optic rollout. Though he was reluctant to state exact arrangements in place for the project, Ndemo said everything was on course and major announcements on the progress would be made next month.

"We are progressing well and feasibility studies are on which will lead to the financial arranger doing some things and from there we would also award the contract itself," he said.

Telkom Kenya has already signed a Sh5.7 billion pact with Etisalat of Dubai, paving the way for the construction of an undersea cable linking Mombasa to Fujairah in the United Arab Emirates. According to a statement released during the signing of the agreement in Dubai November last year, the construction and supply contract will be awarded early this year and the project, dubbed The East African Marine System (Teams), will be ready by November. Kenya is supposed to have a 40 per cent holding in the project, Etisalat 20 per cent with the remaining going to investors in the East African region.

Ndemo said in the statement that the deal would create work opportunities for Kenyans, especially in out-sourcing business.

The deal came at a time when Kenya and 15 other African countries are locked in a dispute over the ownership and financing of a separate undersea cable that is set to run from Mtunzini, South Africa, to Mombasa. The undersea cable, commonly known as Eassy project, was started in 2003 by the World Bank at a cost of Sh14.4 billion but has been dogged by controversy with several member countries accusing South Africa of trying to hijack it.

Eassy is aimed at connecting eastern and southern African countries through a fibre optic cable system to the rest of the world.

The PS added that the Dubai deal had come about because of delays in concluding the Eassy project, which had made the country miss "huge" business opportunities.

"From our estimates, Eassy will take too long to start and may not even take off and that would be a huge risk for our country," Ndemo said

However, Ndemo emphasised to FS last week that Kenya would not abandon Eassy. Ndemo said the undersea cable was important in connecting Kenya to the outside world through the ongoing terrestrial fibre optic wiring of the country, a process which he added, should be completed by September this year.

Old Town houses fall

noreply@blogger.com (Mwananchi) — Tue, 05 Dec 2006 09:56:18 -0600

Kenya’s tourism potential is being undermined by neglect of old, Arabic design houses in Mombasa. Patrick Beja tells a story of a collapsing heritage site due to disagreements among house owners, the National Museums of Kenya, and Mombasa Town Council

Buildings bearing the beauty and unique architectural design are gazetted as national heritage and conserved by the National Museums of Kenya (NMK).

They are adjacent to the landmark Fort Jesus museum and both attract hundreds of tourists.

However, the collapse of two old houses within the 31 hectares of conservation site two weeks ago has raised eyebrows and sparked debate among property owners and leaders.

The two houses crumbled like cards during heavy rains, threatening lives.

The incident has put NMK and Mombasa Municipal Council on the spot over red tape in approving applications by owners to rehabilitate the 667 ancient buildings that host hundreds of residents.

However, NMK’s Mombasa Old Town Conservation Office (Motco) was quick to defend the approval procedures for rehabilitation of buildings in theconservation area by itself and the council.

Motco’s acting principal architect, Mr Kassim Omar, instead blamed multiple ownership of the buildings by descendants of the original owners for the delay in repairing their dilapidated homes.

Most of the buildings are owned jointly by families who are scattered, and this makes it difficult for them to reach a consensus to restore falling houses.

Delayed action by house owners

In an interview, Omar said there is a building in the conservation site under lock and key since 1969 after the owners reportedly deserted it and relocated to the United Kingdom.

"While there are reports of absentee landlords at the Coast, we are faced with absentee house owners in Mombasa Old Town. Even for families living

in Mombasa, it takes years for them to reach a decision to rehabilitate a dilapidated building," Omar argued.

He suggested that the house owners give agents powers of attorney to act on their behalf and rehabilitate the houses before they collapse.

The process of approving developments in the conservation area by NMK and the council can be done in less than a month.

"The real problem is delayed action by the house owners," he said.

To kick off the process, the owners have to pay Sh500 to Mombasa Municipal Council for building application forms in addition to development charges depending on the size of their houses.

More ruins of buildings, which collapsed after the heavy rains.
The owners then have to seek approval for the house design from the MOTCO, and back to the council for assessment and final approval.

"The biggest challenge for us is to educate the house owners in Mombasa Old Town to ensure they appoint people to manage their property. This will enhance communication with us when we want them to rehabilitate their buildings. At the moment, it is difficult to get a response from them," Omar said.

Towns on world heritage list

Mombasa District Commissioner Mr Mohamed Maalim recently convened an urgent District Development Committee (DDC) meeting and blamed the collapse of two houses in Mombasa Old Town on NMK and the town council bureaucracy in approving the demolition and rehabilitation of old buildings.

The DC said 27 houses in the conservation area require urgent rehabilitation, while 35 others are unfit for human habitation.

"Though it is important to conserve our national heritage, human life is most sacred. Eight houses are dilapidated and 27 require urgent restoration," Maalim told the meeting attended by Town Clerk Mr Roba Duba.

The conservation challenges emerge at a time when NMK has already prepared a prepared to be forwarded this year to Unesco with the aim of including Mombasa Old Town and Fort Jesus in the world heritage site.

Omar this would earn the conservation site global recognition, and attract foreign tourists to the Coast. Values of Old Town properties would increase as a result.

In 2001, he says, Lamu Stone Town in Kenya and Zanzibar Stone Town in Tanzania were placed on the world heritage list and are now teeming withtourists.

The DDC asked the NMK and the council to avoid red tape when owners seek approvals to rehabilitate falling houses. The council was further asked to prevail on owners to pull down and rehabilitate all houses in bad shape.

One of the house owners, Mr Ali Jaffer accused NMK of taking too long to act on their concerns. Jaffer said that he had applied to the NMK to allow them to repair their building but they hesitated.

"It is a big hussle to get approval to rehabilitate houses in the conservation area," Jaffer protested.

Another resident, Mr Mohamed Daud, urged NMK to take responsibility and ensure old buildings are maintained as per the standards set in all World Heritage Sites.

Apart from Mombasa, NMK has gazetted ancient buildings for conservation at Lamu Stone town in Lamu district where owners must get approval before rehabilitating them.

But Omar distanced NMK and Motco over the Mombasa Old Town incident, saying the owners were notified of the appalling state and gaping cracks of the buildings way back in 2000 but failed to act. NMK approved the repairs in April 2002.

NMK says owners of the old buildings should take urgent steps to rectify situations before they get out of hand. "Let them understand that Motco is in charge of the development control in Mombasa Old Town, and is ready to assist the residents to better manage their heritage," says Omar.

He says that when the European Union gave NMK a Sh30 million grant, a number of buildings in Mombasa Old Town and Lamu stone town were rehabilitated.

"In this regard, it is not in its (Motco) duty to stifle the development aspirations of the residents," Omar said.

NMK, the Provincial Administration, town council and the Mombasa Local Planning Commission on Mombasa Old Town will organise a forum for all owners of old buildings to seek remedial measures.

The Planning Commission oversee the conservation and rehabilitation of the built heritage in the town.

Kenya signs undersea cable pact

noreply@blogger.com (Mwananchi) — Thu, 23 Nov 2006 08:25:56 -0600

By John Oyuke

Kenya has entered into partnership with global telecommunications service provider Etisalat to lay the proposed $110 million (Sh7.9 billion) undersea fibre optic cable, popularly known as The East African Marine Systems (Teams).

The cable will connect east and horn of Africa countries to the rest of the world is expected to drastically reduce the cost of telecommunications.

It will also offer high quality broadband connections that will enable the region’s industries and business to be competitive in the global economy.

Telkom Kenya has signed a memorandum of understanding with Etisalat of United Arab Emirates to lay, operate and maintain the cable, which will connect Mombasa and Fujairah in the Gulf of Oman.

Managing director, Mr Sammy Kirui signed the agreement on behalf of Kenya. Information and Communications minister, Mr Mutahi Kagwe, Permanent Secretary Dr Bitange Ndemo, the Director General of Communications Commission of Kenya Mr John Waweru witnessed the signing in Dubai last Wednesday.

"The two parties are committed to run an aggressive race to enable the cable will be ready for service by November next year. The construction and supply contract will be awarded early next year," a statement from the Information and Communications ministry released yesterday said.

Kenya was among the 16 countries that declined to sign the East African Submarine Cable System, also known as Eassy special vehicle protocol mid this year. Kenya was not happy with the fact that Nepad was taking over ownership of the project.

Meanwhile, Kagwe said yesterday the government was only aware of two shareholders in Safaricom.He did not however rule out the fact that other parties, through an internal arrangement, could be holding five per cent of the Vodafone shares. According to a local weekly, Mobitelea Ventures Ltd, said to be associated with prominent figures in the regime of former President Moi, could still hold as much as five per cent of Safaricom.

Isiolo to get international airport

noreply@blogger.com (Mwananchi) — Wed, 14 Mar 2007 19:27:12 -0500

By ALI ABDI

Isiolo could one day be a bustling city with its own international airport serving the tourism and film industries.

The Government has formed a high-powered taskforce to develop the frontier town into a resort city. The 20-member team, chaired by Head of Public Service Mr Francis Muthaura, first met on August 11 at Harambee House in Nairobi.

According to a confidential report shown to The Standard by a member of the team, they have only a few weeks left to compile a report to be presented to the Cabinet in January next year.

The task-force includes three permanent secretaries — from the Transport, Roads and Public Works, and Tourism and Wildlife ministries — as well as the heads of the Kenya Wildlife Services, Kenya Airports Authority, Kenya Tourism Board and Ewaso Nyiro North Development Authority. The chairman and clerk of Isiolo County Council are also in the team.

In a letter dated August 4, Muthaura said the Government is keen to develop the town.

"Isiolo has great potential to contribute to national development because of its strategic location," he said.

While Isiolo is the leading tourist destination in the Northern Circuit, it is still considered a little off the beaten path.

"This is where the tarmac road ends," writes a reviewer for online tourist guide Go2Africa.com. "The frontier town marks the start of Kenya’s north-eastern area of desert scrub, mountains and Lake Turkana."

With its three game parks, Central Isiolo has several luxurious safari camps and tourist-class lodges, among them Samburu Serena and Sarova Shaba. It is also adjacent to Samburu Game Reserve, Meru National Park and other private wildlife conservancies.

Muthaura said the Government is also keen to develop the film industry in the district. Shaba National Park is dubbed ‘Kenya’s Hollywood’ having attracted numerous film-makers over the years. More than ten major films including To Walk With Lions and The White Maasai, as well as TV shows like Survivor Africa have been shot there. Shaba was also home to the world-famous lioness Elsa reared by Joy and George Adamson, the subjects of the movie Born Free.

Muthaura said the tarmacking of Isiolo-Moyale road would connect the town with Nairobi, other neighbouring towns and to northern Kenya. A proposed international airport at the town is also meant to further boost the growth of the town. With its proximity to towns around Mt Kenya, the proposed airport is expected to serve Meru districts, Laikipia, Embu and Nyeri.

Other proposed facilities include hotels, casinos, golf courses, polo and camel derby stadiums. Camel riding and derby already exist in the area but Sarova Shaba plans to set up a golf course that straddles the Ewaso Nyiro River.

The task-force have planned to visit game parks, existing game lodges, the Isiolo-Moyale road and the sites of the proposed Isiolo airport later this month.

Going postal

noreply@blogger.com (Mwananchi) — Wed, 28 Mar 2007 14:03:01 -0500

By Kenneth Kwama

G4S Security Services (Kenya) could be the first private company to offer postal services in the local market if the Communications Commission of Kenya approves its application.

According to a company fact sheet, the company plans to offer the full range of postal services, currently being offered by the Postal Corporation of Kenya (PCK), which include postage stamps, courier, letter handling and box number rentals. G4S Communications Manager, Mr Carlos Kioko and General Manager-Courier, Mr Eliud Muriithi confirmed that the company was preparing to offer postal services to its clients.

"The MD (Mr Ken Wood) applied for a postal licence from the CCK last year, but it was turned down," they say. "The company is planning to apply again for the same licence soon."

If the new plan succeeds, all customers will have to do to post either local or international letters is buy a corresponding value of new generation stamps from any of the company’s 120 branches, affix them to the letters and post as they would at any post office branch to have it delivered to the destination. Currently, PCK is the only organisation allowed by Kenyan law to offer postal services.

The phony war

noreply@blogger.com (Mwananchi) — Tue, 26 Sep 2006 10:03:25 -0500

Last Updated on September 26, 2006, 12:00 am
By John Oyuke

Safaricom chief executive Mr Michael Joseph didn’t have a ‘Mission Accomplished’ banner hanging on the wall behind him when he spoke at a British Council Leaders’ Forum in August.

But he might as well have. In his candid remarks about the mobile services industry he painted a picture of a vastly different battlefield from the one long described in the media.

It hosts a war of numbers, not just headline-grabbing subscriber numbers but also a handful of other metrics that now describe the true frontline for the two mobile network operators.

As getting new subscribers becomes costlier, the real battle lies in bolstering Average Revenue Per User and ARPU margins in an environment where cheaper tariffs must eat into revenues.

"The competition will put pressure on the bottom line going forward and we will definitely not have the margins that we see today in the coming years," Joseph said in an interview last week.

"Instead we will be spending more money on the customer, more money on customer service, more money on new products."

The increased competitive pressure is already invigorating the market with attractive marketing and promotional campaigns for cut-price tariffs.

Short-term strategies

Celtel Kenya managing director, Mr Gerhard May, admits falling ARPUs are an important factor.

However, he says there are enough examples in the industry where operators have managed to maintain good profitability even with falling tariffs.

May believes that the growing competition in the industry, particularly on the mobile front would be fought on products, quality, customer service and branding.

"The short-term strategies currently being applied by some players like trapping the customer by charging low on-net calls and prohibitive off-net calls on poor quality networks will become an outdated business model," he says.

May also believes there is still a huge potential for growing subscriber numbers in the local market since the penetration is still well below 20 per cent compared to other Celtel markets in Africa where the penetration level is above 30 per cent.

"We are focusing on untapped market segments by accelerating roll-out and launching innovative services like One4All, a service where an ordinary cell phone is transformed into a payphone," May told FS last week.

Operators now offer data services

Michael Joseph contends that with call costs coming down, price competition increasing, new competitors entering the market and low per capita income, the average revenue currently received from customers has nowhere to go but down.

This is even more certain as operators bring in more people in remote areas (the last and least profitable places to roll out). Those people, he says, would tend to have less money to spend.

Keeping up profitability numbers will soon depend more on prudent management to keep costs down and adoption of new products and services at the more sophisticated end of the market.

Both Safaricom and Celtel have made strategic shifts from ‘mobile only’ plays and now also offer data services, in line with trends around the world. Both offer Internet access services but without a critical mass of subscribers both willing to pay for them and in possession of GPRS-enabled phones, these remain nice-to-have offerings.

In his Leaders’ Forum speech Joseph dropped a hint that Safaricom would launch a new product that would "change Kenyan’s lives". Safaricom watchers say this might be a hint at a data service like Vodacom SA’s look4it, which allows users to find public facilities available in their vicinity.

Vicious mobile price war

Voice telephony remains the heart of the fight for now. Joseph says what is happening in the local telecommunications market should have been foreseen three to four years ago and that with the market continuing to grow and data services becoming more important, the competition could only get stiffer.

He says though the two operators have always competed for customers, the going then was easier as they were selling services and products to people who were in dire need of them and were out there waiting for delivery.

"The people who wanted to become our customers became our customers," he says. "They were at that time fighting to have our services because they needed them but now we must fight hard to protect our market share."

The vicious mobile price war also appears to be probing unexplored areas with both the two operators now increasingly targeting the pre-paid side of mobile business — hitherto associated with second-class services and lower returns — with specific-time tariffs allocated to subscribers to make calls at reduced rates.

Increasing attraction of prepaid services

Some of the latest products in the market as a result of the renewed competition amongst the two players, and which are expected to spur growth in the subscriber base in the increasingly price sensitive mobile telecommunications market includes the Celtel’s ‘Furahi Day’ enabling pre-paid customers to call any network in Kenya for Sh11 from 6pm to 6am once a week.

Rivalling this service is the Safaricom’s ‘Asante Sunday’, which allows customers to enjoy up to 75 per cent discount on normal calls made on Sundays from 6am to 6pm. Another recent arrival in the market is SaaSa, a new tariff from Safaricom that allows cheaper phone calls and SMSs (by about 50 per cent) between 5pm and 8pm.

Joseph says the ‘Saasa’ product is targeted at the youth — aged 16 to 25 — who make most of their calls after school or work but before dinner.

Market watchers attributes one of the factors driving the increasing attraction of prepaid services to saturating market for post-paid long-term contracts and the fact that is provides payment in advance and has no bad debts.

Pressure on revenue from new players

May disclosed that its recent strategy of increasing focus on customer service, launching of innovative products and services, had resulted in Celtel’s ARPU increasing by more than 20 per cent in the last three months.

Though already managing a huge subscriber base, Joseph claims Safaricom still manages an ARPU range about twice Celtel’s, but he did not disclose the range.

It is estimated that across Africa on the mobile footprint, the monthly ARPU ranges from $7 to over $35 (Sh500 to Sh2,500) with the higher end of the ARPU scale is found in places like Sudan and Gabon. Market watchers estimate monthly ARPU in Kenya lies in the Sh500 to Sh2,100 ($7-20) range.

Such numbers make for razor-thin margins and amplify the effect of competition in all areas of the business. Joseph has his mind on future pressure on revenue from new players like Telkom Kenya, ‘last mile’ explorers like Popote Wireless and Flashcom, and the second national telephone operator expected in the marketplace.

Telkom to roll out mobile phone services

He says Telkom and the local loop operators will take the battle to the doorstep of the mobile network operators by luring their customer base with the promise of quick connection and service efficiency.

A restructured Telkom Kenya could do much to claw back lost market share if the advantage is not stolen from them while they battle to get fighting fit.

Even before they get into shape, Telkom is already revamping its service offerings to stem the fall in revenues and tap into new business areas.

The state-owned utility has said it will roll out mobile telephone services using the CMDA technology starting next month, with its eyes focused on tapping into the existing base of mobile phone subscribers, estimated at six million.

Managing Director, Mr Sammy Kirui, says the company will increase its customer base and grow revenue using CDMA technology.

Telkom intends to make more money from the 6.5 million mobile phone users by offering competitive tariffs.

Scramble for subscribers

Once implemented, the CDMA move by Telkom is expected to lead to radical switch in the subscriber base and put further pressure on prices given that the parastatal intends to charge as low as Sh6.38 per minute for its calls compared to Safaricom’s Sh11 and Sh50 and Celtel’s Sh11 and Sh30 per minute respectively.

Joseph says that the expected increase in the scramble for subscribers as operators aggressively seek to retain their market share is good for consumers, with pricing and service quality forming the key battlefronts.

The Kenyan mobile consumer, he opines, is likely to be the major beneficiary as tariffs are likely to come down and service offerings expanded and improved.

Industry observers say with new players coming into the wireless voice market and subscriber-rich areas getting exhausted, scramble for new customers is bound to intensify with pricing and service quality being the key battlefronts.

Confusion as prophecy by doomsday cult fails

noreply@blogger.com (Mwananchi) — Wed, 13 Sep 2006 09:20:55 -0500

Standard Team

Confusion and division has hit the House of Yahweh sect after their prediction that the world would come to an end yesterday came a cropper.

Yismayah Cheruiyot and Yamadah Lang’at pray in a bunker as they wait for end of the world. The doomsday prophecy did not come to pass.

House of Yahweh followers were divided on the interpretation of a prophecy that depicted the end of the world through a nuclear war yesterday.

The result was confusion and division in Nyandarua District even as panic gripped parts of Mauche in Molo, Nakuru District, with sect members entering bunkers dug in their houses.

The sect leader, Eleazor Kamotho Mugwe, said their prediction had been misunderstood to mean the end of the world yet theirs was the beginning of the doomsday prophecy.

"It can take up to seven years from now for the said nuclear war to take place because the prophecy talks about September 12," said Mugwe.

The leader, who was speaking to journalists at the Nyandarua Police division headquarters in Nyahururu town, said the war and its devastating effects did not scare them.

He said they had taken their children to school as a routine, adding that they were going about their daily chores contrary to media reports.

Mugwe refused to be drawn into discussing the sect’s activities in Nakuru District where a section of the media reported that they have dug bunkers to shield themselves from nuclear war effects.

"What we know is that after the prophecy, we should be prepared for anything, but we do not know precisely when the war begins," he said.

Mugwe said he presented himself to Nyandarua OCPD, Mr Amos Owang, to assure the Government that he was not hiding in the bunkers.

The leader, alongside another, was bonded to keep peace for two years by a Nyahururu court.

The sect had predicted that the Oslo accord signed in 1993 between Israel and the Palestinian Authority and witnessed by then US President Bill Clinton was to collapse yesterday without peace in the Middle East, which would eventually lead to a nuclear war.

In Mauche, residents converged at the homes of the followers as police intensified patrols.

Likia OCS, Mr Shadrack Charo, said the police would monitor the situation to avoid cases of mass suicide.

"We do not want a repeat of what happened in Uganda when members of a cult killed themselves because of their beliefs. We will continue monitoring the situation," he said.

Speaking at his house where he has dug a pit, Mosheh Sang said the followers were not going to commit mass suicide, but were following the teachings in their holy script.

"People see us as a cult, but I am assuring people that we are following the 613 laws as contained in the book of Yahweh," he said.

Sang said the members were stocking food in their bunkers in anticipation of the end of the world.

The members who differ with the teachings of the Bible believe that yesterday was the beginning of the greatest tribulations on earth before the return of their king.

"We do not subscribe to the Bible because its writings are not original. They are translations which are not true," said Yaaqob Kiplagat, a follower.

The followers have stocked molasses and busaa in the pits dug in their mud houses, which they claim would act as defenses against the harmful nuclear radiation.

Nyandarua DC, Mr Khamisi Shivogo, said they were watching the members closely after their prophesy failed.

Bush lauds Kenya’s fight against terror

noreply@blogger.com (Mwananchi) — Wed, 13 Sep 2006 09:16:51 -0500

By Chris Wamalwa, Washington DC

Kenya is a close and valuable ally in America's global war against terrorism, US President George Bush has said.

President Bush, who received credentials from the newly appointed Kenyan Ambassador to the US, Mr Peter Ogego, at the White House, singled out Kenya as a key partner in the Horn of Africa in the fight against terrorism.

"We hail Kenya’s efforts in bringing about peace and security to the East Africa region, and in promoting the democratic values and freedoms that the two countries share," Bush said.

The remarks were an apparent continuation of a week-long media campaign by the US President to rally support for his "global campaign against terrorism" following the September 11, 2001 attacks on the World Trade Centre.

Bush also acknowledged Kenya’s efforts in brokering peace in the region. He appreciated the country's leadership in regional peace processes, as well as its participation in United Nations peacekeeping operations in Africa and the world.

He said Kenya’s renewed economic growth was encouraging and that he would like to see an increase in Direct Foreign Investment in the country, particularly by US businesses.

"While appreciating Kenya’s efforts at wide ranging reforms, I’d like to urge Kenya to remain focused on combating corruption in all its forms and in promoting good governance," he added.

The Ambassador was accompanied by his wife Rose Ogego and their three children. Later in the evening, the Ambassador hosted a colourful dinner at his residence, Kenya House.

Seven firms in race to compete against Telkom

noreply@blogger.com (Mwananchi) — Wed, 13 Sep 2006 09:13:50 -0500

By Noel Wandera

Seven telecommunication firms have now been short-listed to vie for the second national operator licence.

This means that one firm has been dropped from the list of eight that Communication Commission of Kenya (CCK) Director-General Mr John Waweru announced earlier in August to have pre-qualified.

Although Waweru declined to name them as the firms pre-qualified, it has emerged that those in the race included France Telecom, Telkom South Africa, India’s state run Telco, Mahanagar’s Telephone Nigam Ltd and Emirates Telecommunications Corporation.

A consortium led by Swedtel of Sweden is also in the race and VTEL from Palestine.

CCK has also pre-qualified Bharti Venturetech of Mauritius.

The CCK chairman, Mr Joseph Njagi, regretted the delay in the licensing of the SNO.

"We do appreciate that the country has lost enormously due to the delay of entry of a competitor to Telkom-Kenya," said Njagi.

The first attempt to find an SNO was in 2003. It was, however, cancelled after only one bidder was left in the race.

According to the CCK plan, the SNO provider will be announced in December.

However, the new operator is expected to start rolling out its services in May next year.

"This is because of the equipment must be customised and therefore the winner will have to go back and start manufacturing them to the local specifications," said Waweru at an earlier meeting.

The winner will have a unified licence, which will enable provision of mobile telephone, Internet backbone, international voice gateway, commercial Vsat and long-distance voice and data services.

Mr Bitange Ndemo, the Permanent Secretary in the ministry of Information and Communication, hoped the SNO would streamline telecommunication charges.

"These prices are still high for majority of users," he said adding that he expects "the second operator to inject the necessary competition to bring" them down.

Representatives of the bidding firms also attended the function at the CCK headquarters where the announcement was made.

Mr Per-Olof Janson, Swedtel’s director for business development in Africa is quoted as saying that a converged licence was an important incentive.

"This is a universal licence ... convergence and universal licensing has helped a lot to increase the interest and competition," Reuters News Agency quoted Janson as saying.

CCK said the interest shown by international firms was due to a general recovery trend that the global telecommunication industry is going through.

The 13 international firms that had shown interest in the SNO include high profile telecommunication companies like Portugal Telecoms, Saskatel of Canada and Detecon of Germany. Telkom has been unable to satisfy demand for fixed-line telephony, a gap Celtel Kenya and Safaricom have filled through provision of mobile telephony services.

By June, CCK says the two providers had a combined subscription of 6.48 million, against a paltry fixed-line subscriber base of 300,000.

Kenyans to get share of Sh70b from Microsoft

noreply@blogger.com (Mwananchi) — Sun, 25 Feb 2007 11:25:48 -0600

By Benson Kathuri

Kenya is among 14 African countries that will benefit from a Sh70 billion Microsoft sponsored programme.

Microsoft’s chairman for Africa, Dr Cheick Diarra, said the Unlimited Potential (UP) programme would mainly target the youth.

"Microsoft has made a five-year $1 billion commitment to UP and other programmes meant to bridge the digital divide," said Diarra during a news conference in Nairobi.

"Through UP, Microsoft, the Government, Non-Governmental Organisations and private sector institutions can empower the youth and adults through training in software, entrepreneurial and Information and Communication Technology (ICT) skills."

Diarra said ICT provides the most effective tool to fight unemployment that is facing many youths.

He said hundreds of young people have been able to join the giant ICT Company associated with US billionaire, Mr Bill Gates and are working in many countries across Africa and Asia.

Diarra would be meeting senior Governmental officials and key private sector players to build a public-private partnership in the sector.

He said computer skills offered in the country do not meet the specific market demand and hence, the youth were unable to secure jobs available in the sector.

"Through such partnership, specific skills in areas like telecommunications, software and services can be developed," said Diarra.

Last year, the company launched its Kiswahili localisation programme of Microsoft Windows and Office.