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Monday, April 24, 2017


Dominant telco, Safaricom, has caused major disruptions in communication in the country after experiencing problems in its Network Subsystem.

This is the system responsible for establishing calls and routing them within and to other networks.

The problem appeared to be with its Mobile Switching Center servers (MSC-S) a group of interconnected switching nodes that manage connections between subscribers or the interface through which calls are routed within the network using what is called the BICC protocol.

This would be what is called the Nc-interface where calls are transported within the core network and the widespread nature of the problem suggested that this is where the problem may lie.

So, while the radio network system is sending the requests for connection, and they are being received, the establishment of the required connections is not taking place as it should. It is not clear if this is due to a physical fault like a broken cable, or a software malfunction particularly in the case of any software updates.

Safaricom's Core Network Support Engineers are working to resolve the problem which has come at an inopportune time as political parties nominations continue across the country and constant need for communication with party headquarters to resolve crises is paramount.

Wednesday, January 4, 2017


Monopoly Power distributor Kenya Power has announced the exit of its CEO Dr. Ben Chumo with effect from Friday, 6th January.

Dr. Ken Tarus, the Finance Manager, will take over in acting capacity as MD and CEO.

Chumo has been at the helm of the utility since 2013 when he was appointed in acting capacity to replace Joseph Njoroge after the latter was appointed PS Energy.

Chumo was previously the Chief Manager, Human Resources.

Upon his confirmation several months later, he embarked on restructuring the organization which saw the retirement of several senior managers along with the exit of others who were did not fit with the new thinking.

Chumo has overseen the first phase of the last mile connectivity project as well as the signing of several PPAs with power producers.

Friday, December 9, 2016


Unconfirmed reports indicate that mobile operator MTN of South Africa is considering making a bid for Airtel Kenya operations as the struggling carrier continues to bleed cash.

It is not clear at what stage those talks, if at all, are but the corporate grapevine suggests that this may be more than a passing interest for the giant telecom with a footprint across the continent.

If valid, this would provide leading telco Safaricom with its first serious challenge from a company with experience in doing business on the continent.

The Kenyan market is not altogether new terrain for MTN. The company already operates in the country as MTN Business after taking over the operations of corporate Internet Service Provider, Uunet Kenya a few years back.

And with margins from Voice revenue shrinking, the battle for the next decade is likely to shift to Data services and Mobile Financial Services. MTN already operates on both fronts.

Concurrently, the industry regulator, Communications Authority of Kenya, is awaiting the findings of a study it has commissioned on Market Dominance out of which far reaching policy changes affecting the competitive landscape could be made.

Also, third operator Orange, recently taken over by private equity firm Helios Partners, is expected to make a resurgent push for market share in Q1 2017.

After assessing its network and realizing that Orange had made significant investments into a first class network, Helios has gone about getting the right people to run the company quietly staffing it with experienced managers.

Reports indicate it could overtake Airtel into second place in market share after its initial push.]

An independent report by Safaricom for instance, showed that Orange is gaining the largest share of the teen market something it could work hard to convert into long time subscribers.

Either way, the market is about to witness interesting developments.

Friday, November 25, 2016


Pay-TV market leader GOTV has announced a 24 per cent drop in its monthly subscription prices for the coming three months as viewers get into the festive season.

This is a drop from Sh920 that subscribers have been paying for access to 44 channels including all the local channels.

This will also include Telemundo, FOX life, Eva Plus, M-Net Movies Zone, Zee World, E! Entertainment, Nat Geo Wild, SuperSport 9, Disney Junior, and Nickelodeon.

The move comes barely a month after GOTV proprietor, Multichoice also slashed prices of its satellite pay-TV DStv and ramped up channel offerings by up to 11 channels per bouquet.

This coincided with the original MNET channel hitting the 30 - year mark during which it released a documentary highlighting the path from a single channel to the multimedia content provider that Multichoice is today.

Since its inception, GOTV has grown to be the top TV subscription service in the country with a presence in most towns.

The new prices are effective immediately.

Thursday, November 24, 2016


Mbuvi Ngunze will quit as Group MD and Chief Executive Officer of Kenya Airways early next year.

A statement issued by newly appointed KQ chairman Michael Joseph said Mbuvi would leave within the first quarter of 2017 and after a successor has been named.

Joseph said he will personally lead the search for the next CEO along with the Board's Governance committee.

The CEO is exiting at a time the national carrier is weathering financial and operational turbulence occasioned by massive losses and a weak balance sheet.

The airline has earned the dubious distinction of announcing the largest corporate losses amongst listed companies losing over Sh25billion in successive years.

Mbuvi who came in as Chief Operating Officer in 2011, succeeded Titus Naikuni as CEO about two years ago.

However, the problems the airline has faced are seen to have been brewed during his predecessor's era when the airline went on an expansion spree that placed financial strains on its operations.

It has been involved in what some see as a fire sale of some of its assets including a prime landing slot at Heathrow Airport.

The Kenya Airways share closed at Sh6 (US$.06) on the Nairobi Securities Exchange.

Mbuvi is the latest senior management member to leave the airline following the exits of former CFO Alex Mbugua, former Chairman Dennis Awori and several senior management staff.

Thursday, November 17, 2016


Listed-telco Safaricom has confirmed it will take on Payment processors and Banks with its MPESA card if pilot testing gives positive results.

It has put its MPESA card on trial in the market with college students and the company's staff serving as the test groups.

If successful, the company plans to launch the card in the market to take on the market dominant Visa Card.

Safaricom is testing a Tap and Go card which users only need to tap onto its own Point of Sale card readers.

This is likely to build on the success of its Lipa na MPESA (Pay via MPESA) merchant service which grew by 73 per cent in the first half of the current financial year as compared to the same period last year.

However, for some points of sale such as at the Supermarket, the service tends to be tedious and delays queues perhaps calling for the much faster Tap and Go Card.

American payments processor, Visa Inc has seen its Visa Card grow rapidly in the Kenyan market the last few years.

Leading the charge have been Gas Stations where customers prefer to pay using cards. Supermarkets, Restaurants, Pubs and other outlets especially in malls have also embraced the card payment system as it is both efficient and cuts down on risks.

The Customer to Business transaction segment is among the fastest growing for MPESA. Lipa na MPESA alone grew 74%.

Overall, MPESA generated Sh26bn in revenues from 17.6m active customers in the six months to September 30, 2016.

By moving into this space, Safaricom seems set to take advantage of the failure by the Banking Industry to implement a seamless inter bank switch to bypass MPESA and other Telcos fees as initially envisaged when transferring money.

That plan was dented in large part by the two big players in the industry; Equity Bank and KCB.

Equity in particular, with its multiple partnerships with card vendors like MasterCard, Visa, American Express and so on was implacably opposed to the inter bank switch having Merchant Banking.

Until the issue of dropping Merchant Banking was dropped, Equity would not sign on, its CEO James Mwangi said,

Merchant banking would have meant that Kenyans could buy goods and services and the settlements take place within the banking system without involving Visa or Mastercard or even Lipa Na MPESA.

Wednesday, November 2, 2016


Profit machine Safaricom, a listed telco on the Nairobi Securities Exchange will on Friday tell the market how its business activities performed for six month period ended September 30, 2016.

Things Investors will look for

Investors will take keen interest in the company's Statement of Income. Also known as the Profit and Loss statement, it shows, in figures, the company's operations during the period under review and tells the market whether these operations resulted in a profit or loss.

On May 11 this year it reported full-year earnings of Sh55 billion (US$550million) before tax with net profit coming to Sh38bn ($380m).

In making its forward looking statements at the time, Management said it expected full-year earnings in the year ahead to come in at between Sh89-92bn before deducting Interest, Taxes, Depreciation and Amortisation.

This compares to EBITDA of Sh83bn the previous year.

Analysts will be right to expect Profit Before Tax to cross the Sh30bn threshold.

MPESA, the Mobile Financial Services product, will attract particular attention for two major reasons.

  1. Rapid growth - The service grew revenues by 27 per cent in the last financial year to stand at Sh41bn ($410m) and will expect this growth to be matched contributing to the bottom line.
  2. Mobile Betting - At the last briefing, Management indicated that betting companies that use its MPESA service did not contribute significantly to its revenues. This observation will come under greater scrutiny this time round especially given the high profile marketing campaigns and international endorsements that some of the betting companies have been making.
Investors will look out for a possible Interim Dividend. With Free Cash Flow oscillating around Sh30bn, many will be keen to see if the company will choose to give back some of this cash to them.

In the last period reviewed, the Board issued a Dividend of 76 cents per share, an exponential rise from a few years back when investors would bitterly complain about a 10 cents per share dividend.

Investors will also seek Management's Performance Guidance for the second half of the year.

The new Chief Financial Officer, Sateesh Kamath, will be presented to investors for his first Earnings Briefing at Safaricom. He replaced John "JT" Tombleson in the position.