Friday, July 30, 2010
TYCOONS ON THE MOVE! MOBICOM'S PLAN
Reclusive Kenyan billionaire Paul Ndung'u (left in the picture) came to the limelight this week still protesting that he doesn't like people to know him.
The man who holds the single largest individual stakes in many listed NSE companies also happens to be founder and chairman of Safaricom's largest dealer, Mobicom Ltd. That at least was the case until Mobicom terminated the deal last week.
The move to ditch Safaricom came as a surprise to many but even more astonishing was the announcement that Mobicom would now be dealing for Telkom Orange, the consensus sleeping giant of the Telecom sector.
Just what does Ndung'u and his equally rich partner and MD of Mobicom Joel Kibe see in Telkom?
The simple answer is CAPACITY! More on that later but first ruminate on the size of business that Mobicom will be giving up.
As Safaricom's largest dealer doing just about 10 per cent of its business, Mobicom moved Sh450million monthly or roughly Sh5.5billion in turnover annually.
They had 42 Safaricom shops which in turn fed sub-dealers and agents across the country.
By size they dwarfed Samchi and Capital Real Time, two other well known SafCom dealers.
So why move to Safaricom.
For starters this was a deal three months in the making. It was negotiated not just with Telkom Kenya but with France Telecom.
Secondly, Mobicom stands to have Superdealer status as it is the only among the other 56 Telkopm Dealers that has a national presence. The others are regional and will likely have to deal with Mobicom.
But as Joel Kibe put it, the silver lining is in capacity.
"Telkom has a lot of idle capacity," Kibe said.
Apparently, Mobicom is confident it can sell this capacity and make more money than it was making in Safaricom.
Starting August the company will spend about Sh30million to rebrand all its shops with Orange colours.
It then plans to stock a wide range of products including modems, telecommunication equipment, WiMax radios, CDMA gadgets among others. It will also sell fixed lines to customers.
So this is where matters stand, Mobicom believes it has the footprint to take Telkom's products to places where the latter does not reach. Particularly, it hopes to sell the enormous capacity on TEAMS/Eassy that TKL has as well as on Telkom's terrestrial fiber optic network and the Telkom managed government owned National Optic Fiber Backbone (NOFBI).
Kibe 's parting shot: We could do up to Sh20billion in revenues.