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Monday, March 23, 2015

SAFARICOM PURGE: MORE MANAGERS OUT AS BOB REORGANIZES

Three senior managers at Safaricom have reportedly left the company as CEO Bob Collymore prepares to reorganize the company and reduce the number of people directly reporting to him.

Morris Maina, Head of Internet and Content, Tim Nderi, Head of Contact Support and an unnamed other manager are said by an insider to have cashed out on an offer that was presented.

Earlier rumours about the exit of MPESA boss Betty Mwangi-Thuo could not be confirmed although she is said to have left for China on a business trip.

The exits have been surrounded by unconfirmed stories of corruption and fraud necessitating the executive reshuffle.

Safaricom is also set to do a makeover that will see it take a regional outlook sort of like Kenya Power which divides its business units into Nairobi, Mt. Kenya, Coast and Western.

This will allow such business unit leaders to focus on marketing to specific regions.

The company on Friday said two directors, Peter Arina, Consumer Business and Pauline Warui - Customer Service, had opted to leave.

However, talk of corruption and fraud is swirling around the executive suites movement raising fears that more heads at the company are set to roll. Observers say at least one or two more senior managers will fall.

According to sources, Bob Collymore may be considering creating the positions of Chief Commercial Officer and Chief Operations Officer to bring to four the number of people who would report directly to him. The others would be the Chief Financial Officer and Chief Technology Officer.

Collymore is said to be looking at Vodafone India's C-Suite structure which has few direct reports.

This would be the biggest shakeup at the giant telco since Bob instituted Safaricom 2.0 by reducing the number of "Chiefs" and introducing the current structure.

Then, a number of senior managers left including then CTO John Barorot while others rose to head divisions such as Nzioka Waita, Corporate Affairs, Betty Mwangi-Thuo - MPESA and so on.

The business was split into two roles: customer facing divisions with their own P&L responsibilities, and back office business support divisions.

In the pending reorganization, the Chief Commercial Officer may oversee current GM roles in Consumer, Enterprise Business and Financial Services.

Our sources further indicate that regional roles may be created under the CCO to run sales regions the company will carve out in the country and their role will be to drive sales growth in those specific regional.


Friday, March 20, 2015

SHAKEUP AT SAFARICOM C-SUITES AS PETER ARINA EXITS

Long time Safaricom executive Peter Arina has exited the company as CEO Bob Collymore announced a raft of changes at top management.
Customer Service bos Pauline Warui also exited the company to concentrate on personal business.
Sylvia Mulinge will now head the Consumer Services Division which Arina headed with Rita Okuthe from Marketing taking her place as Business Services division.
Arina's exit will certainly excite gossip given he was once seen as the heir apparent to former CEO Michael Joseph.
Word from the company is that the announced changes are meant to reenergize the business. " The message is that we must continually connect with consumers in a fast paced industry. The business is in great shape but we must aim higher in order to stay ahead," company insiders said.




Dear Colleagues,

I wish to announce some changes to the Senior Leadership of the company. These changes have been necessitated by an appreciation that we as a business have become disconnected from our customers’ needs at various levels. We therefore have to repurpose ourselves towards delivering a truly differentiated value proposition for our customers that is based on three key pillars: i.) Superior customer insights, ii.) Operational excellence in our market execution and lastly iii.) The delivery of great products and services.

After 11 years of dedicated service to Safaricom, Peter Arina, General Manager Consumer Business will be leaving the company to pursue other interests. Peter has contributed to the company’s strong commercial performance and during his tenure at Safaricom we have seen the phenomenal growth of non-voice revenue streams such as mobile data, PRS VAS and of course the now famous Skiza portfolio.

It is also time for us to bid farewell to Ms. Pauline Warui, Director, Customer Management, who has opted to step down from her role to pursue personal business interests. Pauline has held the role for the last 7 years, during which time , we have seen the implementation of aggressive call reduction initiatives, launching of innovative customer touch points and of course global recognition for the great work of our call center team.

As part of implementing our talent succession plans, it is my pleasure to announce the following appointments which take effect immediately:-

Sylvia Mulinge, will be taking over as General Manager, Consumer Business while Rita Okuthe will move from her current role as Director of Marketing to take over the position of General Manager, Enterprise Business Unit.
I’m also particularly proud to announce that Janet Atika will move from her current role as head of our retail shop footprint to take charge of the Customer Management team.
In order to bring effect to these changes and to ensure seamless business continuity at all levels of the business, I have also made the following appointments within Band E :-

1.      James Muteti has been promoted to Head of The Consumer Sales Department and will be reporting in to the GM, Consumer Business ;

2.      Victor Ngumo makes a lateral transfer to take up the role of Head of Retail, reporting in to the GM Consumer Business.

3.      Arjun Singh Dhillon will take up the combined role of Head Of SME & Channels reporting in to the GM Enterprise Business

4.      Eric Acholla will coordinate the activities of all shared Marketing services which include Brand, Media, Research, Events, Sponsorships and Activations, Eric will report into the General Manager for Enterprise Business while all marketing product managers will report into the GM Consumer Business for marketing direction.
These changes are necessary for us to be truly reflective of the demands of our customers and to prepare ourselves for the heightened competitive environment in which we are operating.

As we congratulate the new appointees, please join me in thanking Peter Arina and Pauline Warui for their service and wishing them all the best as they pursue their new paths.

Regards,

Bob Collymore
CEO

Tuesday, March 17, 2015

INSIDE DIGITAL MIGRATION'S STAUNCHEST FOE - S.K. MACHARIA

He is seen as the Rupert Murdoch of Kenya. A modern day buccaneer that bestrides the media landscape like a colossus.
From his ivory tower, he gazes at all around him benevolently but is quick to strike at any threat to his burgeoning kingdom.
The patriarch of Royal Media Services, Samuel K. Macharia is estimated to control a vast fortune worth over Sh112billion according to Buzz Kenya spanning interests in agriculture, real estate, finance, telecommunication and insurance.
"Murdoch" has increasingly emerged as the invisible force behind the cartel of three media houses that has gone to the trenches to fight digital migration in the country in a last ditch effort to maintain a cozy oligopoly where they control close to 90 per cent of the advertising spend in the country.
In one year alone, close to Sh40billion is spent on TV advertising and the three companies gobble up most of it giving them the firepower they have deployed in fighting the move to a more competitive digital landscape where content rather than access to limited frequency will dictate audience numbers and determine the advertising spend you attract.
Macharia’s hand is seen in the trenchant and borderline illegal positions being taken by the three media houses given his combative nature where money is involved.
It is easy to see why. With an 86 per cent reach in the country, Citizen TV, Royal Media Services flagship brand, also commands 45 per cent of TV advertising.
Advertising figures from July – September 2014, the latest quarter available, indicate that total spend on TV during that period was Sh8.95billion.
Out of this, Macharia’s take was Sh4billion. In a year, Citizen can gross Sh16bn in advertising revenues explaining why Macharia is fighting tooth and nail in court and playing dirty with misleading adverts regarding GOtv and Startimes.
Notably, only Nation Media Group’s print division comes close to grossing that amount with about Sh13billion a year.
Of the four TV stations who ran the ads, Citizen was particularly incessant in running an ad that claimed the two licensed digital TV carriers were running Free-To-Air channels illegally.
Almost every two minutes, the ad would come on while it was less frequent on the other channels.

This was in line with a "resolution" made at a supposed "training" for journos on Digital Migration organized by the three media houses at the Serena sometime before the ads begun running.

Scribes arriving at the morning to noon training were agape to find SK Macharia himself present there along with lawyers Paul Muite who onstensibly was part of the training team.

After a quick recap of the technical issues, which the scribes were there for anyway, the gathering launched into the real agenda of the day.

"You are our foot soldiers!" A senior editor implored the scribes..."Fight for your jobs!!"  SK himself intoned on the matter and impressed quite a few journos with his knowledge of the media landscape.

"The key message being that we must go out there and fight!" one of the journos who attended told Nairobitech.

Shortly after that, the negative advert blitz started.

To understand  Macharia's nature one only has to look at his history.
The notoriously litigious Macharia has had some of the longest running cases in Kenyan courts.
In 2014, the Supreme Court ended a 34-year old court battle between SK Macharia’s former toilet paper making company, Madhupaper International and KCB that had dragged on since 1981.
After another of his companies’, Royal Credit was denied a credit line by Standard Chartered Bank, forcing it to shut down in 1998, Macharia filed a suit which he has doggedly pursued through the courts since 1999, a period of 15 years.
In 2000, he sued the then Communications Commission of Kenya for closing his media stations. After the NARC government came into power he requested for 20 radio frequencies and 1 TV frequency and received from the then Director-General Samuel Chepkonga, now Member of Parliament for Ainabkoi constituency.
Three years later he wrote a letter to the Minister for Information and Communication Mutahi Kagwe demanding that CCK be directed to settle his suit from 2000 out of court.
 "During this Narc Government, which has had the support of Royal Media Services, CCK has been hunting and harassing Royal Media Services with perhaps intention of closing it again," Macharia wrote.
 "I am requesting your ministry and the government to immediately stop the harassment of Royal Media Services Ltd by ordering CCK to settle out-of-court the cases in court against each other including settlement of legal fees claimed by CCK's lawyers from Royal Media," Machariasaid.

Macharia is not averse to using unorthodox tactics, In May 2004, after media business rival Patrick Quarcoo raided his talent stable for several presenters, Macharia opted to jam Quarcoo’s Kiss 100 transmission bombarding it with Kikuyu songs for four days.
CCK had to raid RMS’ premises to confiscate equipment suspected to have been used in the operation.

In this, his last stand against the regulator's conditions for migration, Murdoch seems determined to drag it out to the bitter end.

COURT EXTENDS BAN ON MEDIA HOUSES ADVERT

The three media houses at the heart of the long-drawn out digital migration duel with the industry regulator will not be able to air anti-GOtv and Startimes adverts until a ruling is made in two months time.

The ad which claimed that the GOtv and Startimes platforms were carrying the media houses' signals illegally and warned customers against buying the accused companies' decoders was the catalyst for drastic action by the regulator to clamp down on the stations.

With their eyes set on the alleged 80/90 per cent TV advertising revenue they control, the three media houses seem to have taken the view that they are better off distributing their own signals and keeping the advertising cash.

But being Free to Air, licensees, they are supposed to be available on all existing platforms.

Furthermore, they have not yet put up the infrastructure which they would use to distribute their signal.

The three look set to open a battlefront to withhold their signals from the existing digital distribution platforms particularly once they put up the infrastructure in Nairobi meaning more court cases lie ahead.

Particularly so, where SK Macharia is involved.

The notorioiusly litigious Royal Media boss has had some of the longest running cases in Kenyan courts.

In 2014, the Supreme Court ended a 34-year old court battle between SK Macharia's former toilet making company, Madhupaper International and KCB that had dragged on since 1981.

Wednesday, March 11, 2015

KQ CUTS 777 FLEET SENDS 10 PILOTS PACKING

National carrier Kenya Airways has released 10 pilots and reduced its active Boeing 777 fleet from 7 to 3 in a bid to stem losses being incurred by on the Jumbo Jet's routes.

The 10 are 777 pilots who were offered the opportunity to switch to the 787 but take a pay cut, a scenario the pilots' union refused to accept.

KQ is said to be increasing its fleet of the more fuel efficient 787 Dreamliner and the Embraer 190s for regional routes.

The triple-7s are the most expensive planes on the airline's fleet as well as the biggest.

It would appear a combination of both the cost of running them and the passenger numbers on the planes' routes have not been making money necessitating the move.

New CEO Mbuvi Ngunze is working to steer the airline back from record loss-making territory and cutting costs appears to be his approach.

KQ has also had to restructure some payments for its planes from the originally agreed time period with the new terms being mutually agreed upon with the companies that lease it the planes.

The airline will benefit from a VAT refund of Sh1.2billion out of the Sh3bn it was claiming from the taxman.

The airline opted to retire the 10 pilots early.

GOtv CUTS DECODER PRICES AS MIGRATION BATTLE MOVES TO PHASE TWO

With the first phase of the digital migration battle over, attention now shifts to platform competition with marketing and content offering likely to emerge the key selling points.

GOtv, Startimes, Bamba TV among others now go head to head with GOtv unveiling the first major promo, the Dunga Milli, for new GOtv buyers.

The company slashed its decoder prices from Sh1,799 (US$19.61) to Sh1,399 ($15.25) and launched a promo that will see new subscribers entered into a draw to win cash.

“For every purchase and activation of a GOtv decoder, consumers will get an automatic entry
into the ‘Dunga Milli’ draw where one lucky Kenyan will walk away with Sh1 million every week 
for the next 8 weeks. But it doesn’t stop there... there will also be daily prizes of Sh15,000, 
airtime plus a chance to win annual GOtv subscriptions plus airtime,” said GOtv General Manager, Mr Felix Kyengo.

Bamba TV meantime has been running continuous ads on its sister radio network led by Kiss 100 and Classic 105 as well as Radio Jambo.

Startimes in the meantime has concentrated on rural areas with ads running on vernacular stations.

GOtv will look to defend its market leading position with Ipsos-Synovate reporting in a study that it holds a market share of 37% against rival Startimes 23%.

Occasional offerings of football on the platform have proved extremely popular with male adult audiences across the country.

Thursday, March 5, 2015

MSHWARI VAULTS CBA PAST EQUITY AS LARGEST KENYAN BANK


CBA Bank has powered past Equity Bank as the largest bank by customer numbers in the country on the back of 10 million plus MShwari customers.

Equity Bank is estimated to have between 8 - to 9 million customers and has long been hailed as the largest bank by retail footprint in the country.

But riding on the back of the popular MPESA mobile money platform that giant telco Safaricom runs, CBA Bank has accumulated more than 10 million retail accounts to make it the first bank to have over 10 million customers in the region.

The privately-held bank is a modern day descendant of Bank of America, the largest US Bank which traded here before it left.

Back in 2006/7, when then Safaricom CEO Michael Joseph was shopping around for a bank to process his MPESA transactions, it was only CBA Bank that took the risk as all the big boys shied away.

The results tell.

Mshwari cumulative deposits to date amount to over Sh153billion.

Sh29billion has been disbursed in loans.

The platform processes 50,000 loans a day.

The Non-performing loan percentage is much lower than conventional banks.

In a statement, Isaac Awuondo, Group CEO said: "This milestone goes beyond a mere number and two institutions. It shatters the myths about how to scale social innovation in banking to expand financial inclusion."

The irony is not lost on anyone that one of the country's most exclusive banks, catering to high-net worth individuals and corporates has in the space of two years become also the largest grassroots lender in the country.