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Saturday, June 27, 2015

AIRTEL EXIT RUMOURS AS SACKINGS CONTINUE

Airtel continued to send staff packing from its Parkside Towers even as rumours emerge that it is seeking a buyer for its African business.

Sources indicate that a number of people on Thursday and Friday this week got their letters and severance packages with the group looking to reduce redundant or unwarranted staff.

Both Kenyan as well as foreign workers are affected.

The purge has affected partners such as IBM who are also said to be downscaling the size of their staff in line with their client.

Airtel has struggled to turn a profit in the African market and is now said to be looking at the option of either selling the entire African operation to one entity or to dispose of separate country businesses to different buyers.

In Kenya the company has been outmatched in investing in its network by rival Safaricom and has struggled to retain subscribers.

Weak marketing staff and strategies have also been its undoing.

Its staff frequently complain it has not invested in modern IT systems and products such as Airtel Money have not been pushed hard enough.

Airtel's footprint in Africa includes Burkina Faso, Chad, Democratic Republic of the Congo, and Republic of the Congo, Gabon, Ghana, Kenya, Malawi, Madagascar, Niger, Nigeria, Rwanda, Seychelles, Sierra Leone, Tanzania, Uganda and Zambia.

Tuesday, June 23, 2015

CA: WANGUSI GETS MANDATE TO CLEAN HOUSE

Defiant top managers at the Communications Authority who had gone to court after being asked to reapply for their jobs now have no option after the Director-General Francis Wangusi, himself underwent the same process of reapplying for his job and getting confirmation by the board.

Wangusi is now expected to clean house and put in place a rigorously vetted management team to help him run the industry regulator for the next four years.

All top managers are now expected to face fierce competition from within the CA and from outside for the various positions they hold once they are advertised.

Wangusi himself fended off 29 applicants to emerge top and receive a fresh four year term at the helm of the CA.

The DG made his mark late last year when he took a tough uncompromising stand with litigious media owners who had opposed the digital TV migration process.

After enduring repeated court suits all the way to the Supreme Court, Wangusi finally had enough when the media owners started running negative ads against GOTV and Startimes.

He emerged from that fight the decisive and unapologetic winner.

Attention will now turn to the telecoms industry where Wangusi had fired a warning shot about industry practices, anti-competitive practices among others.

Safaricom in particular, being the market leader will be wary of Wangusi's next steps.




Monday, June 22, 2015

AIRTEL LEAVES PARKSIDE TOWERS FOR THE OVAL AS FIRINGS LOOM

Airtel Group is set to change addresses from its Parkside Towers offices on Mombasa Road to the newly-built Oval in Westlands.

Kenya is the headquarters for the group operations in Africa. A big "To Let" billboard has already been put up outside the Towers.

The move affects Group not the Airtel Kenya team which will remain on Mombasa Road.

However, it will be a much trimmed workforce that will move to the Oval as the carrier which is struggling with tight budgets and reducing market share in many African countries looks to cut on costs.

Tension is said to be high at Parkside as the final list of those being sent home is polished. A large contingent of Indian staff is said to be heading home.

Insiders say a number of management level staff have already left with the shake up expected to continue.

Airtel reports about 80 million mobile subscribers on the continent but has seen its market share in countries like Zambia, Nigeria and other countries shrink.

In Kenya, the company has about 5 million customers with an additional number gained from the purchase of yuMobile customers.

The Oval, says property manager Knight Frank, has three floors of retail space and 5 floors of office space.

Retail space has been taken up by brands like Artcaffe, Big Square, The Ocean Basket and so on.


Thursday, June 18, 2015

KCB TO ACQUIRE MADISON INSURANCE?


The nation's largest bank by assets KCB Group is said to be considering a takeover of Madison Insurance as the insurance sector heats up.

This would be the latest takeover of a local insurance group in a series of buyouts dating back to last year.

Britam set the dice rolling with its purchase of REAL Insurance before UK-based Prudential swooped down on Shield Assurance. Old Mutual bought a controlling stake in UAP Group before the latest announcement that Barclays Africa will take over First Assured.

Against this backdrop, the Financial Bill 2015/16 read by CS Rotich last week, raised the capitalization requirements for insurance companies portending possible consolidation in the crowded market.

There are 53 licensed insurance companies in Kenya. Their business is brokered by a further 196 agents.

Madison Insurance said it collected Sh2bn in premiums this past year and its assets stand at Sh5.1bn.

The company is owned by the Amedo Madison Holding Group whose anchor shareholders are Samuel Ngaruiya and James Mwangi Wainaina through an entity named Mlima Education Trust.

KCB is of course the largest bank in the region by assets (Sh510bn) hence the tendency for industry colleagues to refer to it as "Benki Kuu"

Observers note that the bancassurance sector may be shaping up to be lucrative for banks informing this flurry of activity.

A number of South African players are also looking for viable takeover targets with strong preference for strong, local brands with no multinational affiliation.

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Wednesday, June 17, 2015

KENYA AMONG 3 TO BEAT DIGITAL MIGRATION DEADLINE

Kenya, Tanzania and Rwanda are the only three African countries that will join other nations globally to meet the digital migration deadline set by the International Telecommunications Union for today midnight.

Kenya's feat is especially impressive given the long-drawn out court battles that have delayed the process and the near record time it has taken to migrate the entire country.

Rwanda has only one FTA channel, compared to 35 plus in Kenya hence was easier to migrate while Tanzania started the process before Kenya.

Digital content carriers Multichoice's GOTV and Startimes have upped the ante in the competition for subscribers in what has become a key battleground on the continent.

To demonstrate what is at stake, both companies were to put up multi-million shilling headquarters to run operations in the region here in Nairobi.

Startimes plans ran into headwinds owing to zoning laws in Karen where it had hoped to put up its premises. It has now shifted its target date to end of next year.

Meanwhile, Multichoice is putting up its complex on Oloitoktok Road near Methodist Guest House with columns for the expected office campus already coming up.

The next phase of the battle will now move to content.

Multichoice is expected to call on its two content development arms, MNET and SuperSport to enrich its offering.

Safaricom and Zuku will also compete on streaming services.

Tuesday, June 16, 2015

GOTV MILLIONAIRES REVEAL HOUSING GAP

GOTV, the digital terrestrial broadcasting arm of Multichoice, carried out over the last few months a campaign in which 12 lucky subscribers walked away with Sh1million each.

The Dunga Milli campaign which was boosted by the participation of the Nation Media Group aimed to award one winner every week.

Most of the winners were average Kenyans, small business owners or employees who had bought the GOTV decoder.

What was interesting is when they were asked what they intended to do with the money most of them said they would either be acquiring a plot, fencing an existing plot or building a house.

Besides one or two of the older winners who talked of paying fees for their children, almost without fail the issue of housing seemed to preoccupy the winners' minds.

This also underscores the biggest headache for many hardworking Kenyans, the ability to own their own home.

The current housing boom in the country's urban areas reflects the margins which developers are making and to an extent how much Kenyans are being overcharged for these developments.

The mortgages and associated charges for purchasing a home are outrageous in this country.

That so many of the GOTV millionaires are seeking to house themselves with the money they won shows how big a need this is and deliberate government policy to support home ownership should be put in place.

Nairobi County should explore partnerships to put up estates like it used to in the past with the last development being Buru Buru.

This allowed young couples to own their homes and pay for them in friendly terms.


Monday, June 15, 2015

BANKS COME AFTER MPESA WITH DIRECT MOBILE BANK TO BANK PLATFORM

Banks have moved to cut out Safaricom's MPESA from mediating transactions where users may want to transfer money directly between banks by developing their own mobile interconnection system.

The system which will allow users to transfer money from an account in one bank to an account in a different bank at much cheaper rates than currently in the market is set for launch in November.

The project is being spear headed by the Kenya Bankers Association and has an IT implementation team as well as external consultants.

KBA chief executive Habil Olaka, says the system once in place will cut the tedious process of a customer having to first withdraw money from their bank account into their MPESA and then having to send the money via the mobile platform to another person's MPESA account.

Instead, they will be able to transact directly between themselves with the new system.