Chebitwey, Washington Akumu shortlisted for Telkom Kenya job

The current CEO of the Kenya Yearbook, Dennis Chebitwey and the former Safaricom Public Relations and Promotions manager Washington Akumu, are among those shortlisted for the corporate affairs head position at Telkom Kenya that was recently vacated by Angela Mumo.

They are joined on the shortlist by Nelly Githaka who used to be the sponsorships manager at Safaricom before leaving in 2010 and Tom Ogola who formerly worked under Angela Mumo before heading to Mabati Rolling Mills.

Mumo left the job for a similar position at Microsoft that had been advertised a couple of months ago.

Chebitwey is a veteran PR strategist who used to work at Gina Din Communications before leaving for the Kenya Yearbook position.

Akumu on the other hand came from the newsroom serving as the Business Editor at the Daily Nation before he took up the post at Safaricom.

Ogola has also been in PR. He worked at the Africa Practice agency handling such clients as GTV, Telkom Kenya and so on before he took a position as a Media & External Stakeholders Relations manager at Telkom.

He then moved to Mabati Rolling Mills and then on to a law firm before starting his own consultancy.

Nelly Githaka has worked for Safaricom and is currently the general manager of Emergency Plus Medical Services.

All these candidates are excellent choices for a post said to command upwards of Sh800,000 a month.

Chebitwey is an excellent PR guy not just in practice but in person. He can work his way through the labyrinth of government offices and parliament and has a keen understanding of lobbying legislators.

Akumu of course brings experience from Safaricom a much bigger entity than Telkom and also understands the news business.

Ogola has the advantage of having worked at Telkom before and having handled many of the duties that will be required of the position.

Githaka would seem to the dark horse in this race but undoubtedly she has her qualities if she was shortlisted along with such a calibre of individuals.

It will be hard to call this one but we see it coming down to Chebitwey because of his experience and inside knowledge of the workings of the government machinery (the government is a key stakeholder for Telkom) and Ogola because of his insider credentials.

Akumu and Githaka are excellent choices too who could be disadvantaged by their "outsider" status.

But at the end of the day it will come down to what exactly Telkom is looking for in the person it wants to hire.

KENYA-ETHIOPIA 400MW POWER PROJECT TAKES OFF

A 686Km high-voltage line to bring 400MW of power purchased from Ethiopia into the Kenyan national grid is set to take off with the signing today of the funding deal with the International Development Agency (IDA), the concessionary-lending arm of the World Bank Group.

The Sh54billion transmission line is part a regional strategy to pool power that will gradually include Uganda and then Tanzania.

The power will come from the controversial Gibe III dam in Ethiopia whose construction has not been without hitches as pressure-groups raised the spectre of adverse downstream effects of damming a river that feeds into Lake Turkana.

Ethiopia is estimated to have 45,000MW of power and first sought guarantee from Kenya that it would take up the power if the nation undertook to put up the HEP dam.

The African Development Bank has already given Sh30billion toward the project while the French Development Bank (ADB) through its infrastructure-arm Proparco and the Government of Kenya will also partially fund the project whose total cost is put at Sh94billion.

Two High-Voltage Direct Current converters will be put up at Suswa in Kenya and Wolayita Sodo in Ethiopia.

The project will be implemented by the Kenya Electricity Transmission Company (Ketraco) and the Ehtiopia Electric Power Corporation (EEPCO).

Kenya will buy the power at 5 US cents per Kilowatt Hour which is much lower than most power producers sell their power to monopoly distributor Kenya Power. Lake Turkana Wind Project for example, proposes to sell power to Kenya Power at 7 US cent/Kwh.

The power will transmit at 600Kilovolts much higher than the beefed up 400Kv line being built from Mombasa to Nairobi to bring power from the likes of Rabai Power station, Kipevu III and the proposed 600MW coal-fired plant in Kilifi.

Indeed, Ketraco is embarking on a stabilization project of the national grid so that it can handle these high voltages.

The power will come in direct current form which is much cheaper to transmit over long distances and sees lower dissipation rates (wastage).

Two high-voltage DC converters will be built at Suswa and Sodo. The Sodo one will convert generating alternating current into direct current for transmission and at Suswa the DC will be converted to AC and injected into the national grid.

The route from Ethiopia, according to project documents will be:from Ethiopia into Kenya approximately 90 km West of Moyale town and traverses Marsabit, Samburu, Isiolo, Laikipia, Nyandarua and Nakuru. From Moyale the transmission line route runs adjacent to the Great North Highway (Marsabit – Moyale) in a southerly direction avoiding Marsabit National Park. From Marsabit area the route runs southwards at a maximum distance of 500 m parallel to the main Isiolo – Marsabit Highway to Laisamis.

At Laisamis Town the proposed RoW runs close to the road as it enters Losai game reserve keeping a range of about 400 m to 800 m off the road reserve then runs further on to Merille where it diverts slightly westwards running east of Matthews Range, 6 km east of the Lololokwe Mountain peak. It then runs through a stretch of fairly flat land covered by thorny shrubs and bushes, and then turns southwards to the Ngoborbit plateaus and ridges dropping altitude down into Laikipia.

In Laikipia, the proposed RoW continues through the extreme western section of Mpala Ranch which is covered by scattered thickets and bushes. Then it crosses Mutara River into Ndaragwa. The line runs on top ridge of Shamata and then sharply drops altitude to the flat plains of Olobolossat, 3.7 kilometres eastwards of Lake Ol Bolossat. It then traverses the Olkalou Settlement Scheme and cuts across Malewa River, climbing a steep hill then drops altitude to the flat land of Marangishu (karati) and on-wards to Kijabe after crossing the Nakuru – Nairobi highways into plains east of Mt. Longonot into the proposed Suswa Substation.

KENYA'S EVA CHEMGOREM WINS DSTV POSTER COMPETITION

Eutelsat.

DsTV and satellite services provider Eutelsat have announced the winners of the DsTV Eutelsat competition which featured students from across Africa with East Africa emerging the big winners.

Anthony Oyom of Uganda scooped best prize for his essay "A watchful eye from above the heaves" which could be both brilliant but also spooky (Big brother is watching) while Kenyan school girl Eva Chemgorem's poster with the more reassuring title, "Africa United through satellites" emerged top.

The students will get an opportunity to travel to France early next year and will also receive other prizes in country such as laptops and decoders.

Eutelsat operates several satellites across Europe, Middle East and Africa including Satellite 16A which covers sub-Saharan Africa.

DsTV with its 6million subscribers on the continent uses these satellites hence the competition's partnership.

DsTV and its new stablemate, digital terrestrial service GoTV are the twin prongs, the Naspers-owned Multichoice with its two content arms, MNET and Super Sport intend to use to extend dominance on the continent.

Chinese Star Times is also investing billions of shillings in a DVB-T2 network to get a slice of the estimated 4million TV market in Kenya.

WHAT TO LOOK FOR IN SAFARICOM'S EARNINGS THURSDAY

Safaricom CEO Bob Collymore.

The management of Safaricom, fresh off receiving its umpteenth trophy for being the top taxpayer in the country, and by extension most profitable company, face investors on Thursday, to give the half-term report of their operations and whether those operations resulted in a profit or loss.

The half-year earnings, under the International Financial Reporting Standards, are presented in a format known as the Statement of Income.

This is one of the reports that a company's management is expected to prepare for external entities such as shareholders/investors, regulatory authorities, the taxman, financiers etc.

CEO Bob Collymore and his Chief Financial Officer will be expected to tell us on Thursday, how much revenue they generated from their operations in the six months to September 30, 2012, how much it cost them to generate that revenue, and whether a profit or loss was made.

Last year at this time the company announced a precipitous 48 per cent drop in pre-tax profits from Sh10.4billion the previous year to Sh5.3billion on the back of falling voice revenues and surging costs of doing business - this was when inflation was mounting and the shilling was taking a battering on the currency markets.

This year BobCollymore will do the following:

He will paint the overall business environment Safaricom is operating in - this will include but will not be limited to:

1. The possibility of another slash in mobile termination rates across networks - this could see rivals especially Airtel unleash another round of tariff wars the likes of which, as the UK's Guardian observed, saw a drop in the country's overall inflation rate and also dropped the jaws of a few telecom executives. Newly-confirmed CCK boss Francis Wangusi, has shown a disturbingly (from the telecoms perspective) independent streak on this issue and looks to be raring to slash the MTRs.
2. Competition across Safaricom's various business units - voice, financial services and data. Some rivals have started offering free money transfer services and independent services are being launched continously including an upcoming one that is said to eliminate the need for third party applications to interface with M-PESA for mobile commerce and online transactions.
3. M-PESA has had some downtimes that will necessarily force people, especially businesses to have a second live mobile money service to reduce dependence on M-PESA. The issue of migration of servers from Germany to Kenya will need to be addressed but more importantly, the Central Bank of Kenya's patience might be tested to the limit especially as more and more of the nation's transactions pass through M-PESA - CBK may seek a permanent solution to these problems.
4. The 4G/LTE issue - a consortium of sorts has been announced, Ericsson has offered to build the country an LTE network for free - where is Safaricom in all this - Again Collymore should address it.
5. The counterfeit phones switch off and likely impact on full-year results and the upcoming switch off of unregistered SIM cards is also likely to feature.
6. Unclaimed Financial Assets and M-PESA - A major storyline that could emerge is how much M-PESA holds in unclaimed funds either from people who passed away, moved out of the country or changed networks. How much Safaricom expects to remit will be of interest both in unclaimed M-PESA funds and unclaimed dividends.

THE FINANCIALS

Since this is just the half-year, these results will not be audited and then again, the auditors work is only to give his opinion as to whether or not, the presented statements have been prepared in conformity with accepted accounting standards.

1. Revenues - Investors will want to see the revenues generated during the period under review and who these break down in terms of voice, SMS, M-PESA, data and devices. Voice has been growing but not as fast as in periods past so that will be an area investors will be keen on. Ditto SMS. M-PESA revenues will generate a lot of interest given the phenomenal growth of this service and also projections going forward. Data will be expected to show momentum but in the face of a shared LTE network being rolled out, the future growth of data will need to be scrutinized more closely.
2. Costs - It costs Safaricom a lot of money to generate its enormous revenues whether it is in putting up Base Stations (CAPEX), marketing and commissions, administration and staff costs, overheads including fuel for its base stations generators and vandalism. How well it is managing these costs and how they compare to revenues on a ratio basis will be important to see if the company is getting more efficient or not.
3. Profits - During the period under review, did the company's operations result in profits or losses and how does it compare to last year? The company will be expected to show a significant improvement in its earnings given that inflation has been dropping, the shilling has been stable, fuel prices have also been stable and MTRs have not changed.
4. Statement of Cash Flows - It is important to see what sort of working capital (Money to run its operations) that the company has. 
5. Ratios - Safaricom has indicated that it intends to lay some fibre to give it better control of its network operations. A good gearing ratio will show if the company can leverage and perhaps issue a cash call (Bond) to the market to raise the Sh4billion it needed for this effort. Currently, interest rates are falling so it might be opportune for the company to come to the market.
6. Units P&L - Several customer facing business units have Profit and Loss responsibilities - It would be important to see how each of these are faring in both generating the revenue but doing so efficiently by managing costs. Peter Arina's Consumer Business needs to show improving efficiency in managing its dealer network and reducing losses in commissions and reported activations and in this regard the average settlement period of accounts payable and receivables will be of interest, Sylvia Mulinge's Enterprise and the Marketing divisions will also need to show improving times in getting products to market as Safaricom's IT bureacracy is known to frustrate a lot of ideas brought to the company for new innovations and in particular Bob Collymore's stated zero-tolerance policy on corruption needs to be shown to be applying here - particularly a dropoff point for complaints and whistleblowers should be instituted to clamp down on this vice and save the company money wasted on padded supply contracts.

All the same the company could report impressive numbers but there remains much to be done in terms of efficiency but also in bringing new innovations to the market especially on the data side.

PETER WAHINYA: AIRTEL FREEZES ACCOUNTS OVER EQUITY BANK LOST FUNDS

The Airtel notice.

Airtel has been running a public notice featuring a Peter Wahinya in the Daily Nation for the last two months, cautioning the public not to deal with him on any Airtel issues.

It is enough to raise anyone's curiosity: what would impel Airtel to spend millions to put a guy's face in the papers?

Indeed, as they are asking at Wazua, how much money did Wahinya take from the company?

THE LOWDOWN

It can be confirmed that indeed, it is a case of money lost from the company.

It turns out, according to sources, that Wahinya, is accused of stealing millions from the company through its Equity Bank account by first transferring the funds from the account into other unsuspecting people's accounts before the money was routed to Wahinya's account.

Some conservative estimates place the money so embezzled at Sh26million.

It so happened that a customer, having notice the coming in and going out of unusually large amounts of funds in his account, raised the alarm.

He demanded to know where that money comes from before it goes out of his account as he did not recognize the transactions.

It is then that the trail was followed and the pictured gentleman's gig was up.

FROZEN ASSETS

As of now, as Wahinya tussles with his former employer, reportedly most of his assets have been frozen. His bank accounts have been frozen.

He is said to have grown a fleet of trucks that plied the Mombasa route -those have also been frozen.

He was also said to have built a few flats - those have also been seized.

It is not clear how the fellow, said to be in his late 20s, managed to pull of such a heist but from all appearances, it must have been done in complicity with a bank employee.

AIRTEL

As for Airtel, there is little incentive to warn the public of Wahinya's existence but according to sources, top brass at the mobile operator have decided to shame him relentlessly by booking the ads basically murder his character beyond salvation.

Meanwhile, expect the battle to take several fronts to court -- from Law Courts in the CBD for criminal related issues, to Milimani where, the Commercial Division of the High Court of Kenya, sits.

NOKIA DUPLICATE IMEIs COMPLICATE SAFARICOM (680K USERS), AIRTEL (130K) PHONE SWITCH OFFS

Safaricom, Airtel, Orange and yuMobile will starting Sunday 30, 2012 will begin exchanging blacklists of bogus handsets to be switched off in batches of 20,000.

Safaricom is targeting 680,000 users initially while Airtel has earmarked 130,000 at the outset. Figures for the other two are yet unavailable.

The figures are supposed to be much higher. Airtel for example is reckoned to have about 800,000 counterfeit phone users while Safaricom could go as high as 2million plus.

The game according to Safaricom insiders, has been complicated however, by handset-maker and vendor Nokia, still the dominant handheld device in Kenya.

Safaricom sources say Nokia a couple of years back made a mistake by releasing huge batches of handsets with idential IMEI (International Mobile Equipment Identity) numbers.

As such, many users on the operators network share IMEI numbers.

Airtel boss Shivan Bhargave is said to have protested to the Communications Commission of Kenya (CCK) who allowed operators to hold off on switching off such phones.

However, those handsets showing a bunch of zeros (0000000) will be cut off without further debate.

To check your IMEI number dial *#06#. You can then send the IMEI number to 115, the common mobile operators database.

The process of switching off is expected to be rolling for about 10-15 hours with 20,000 users being switched off at a time.

It is not clear how the issue of the duplicate IMEIs will be handled.

"It is only Nokia with that problem," Safaricom sources said.

Coca-Cola to launch Coke Zero in Kenya next week

So Coca-Cola, after taking what it deemed a misinformed beating in the press about certain ingredients in its soft-drinks, convened bloggers in Nairobi to hammer in a few home truths.

Bloggers, a yet-untamed quantity capable of terrorizing a brand online, heard terms like caramelization, enzymatic browning, emulsification, food-grade carbohydrates, subject-matter experts and a bunch of other terms that brand managers use.

The whole session boiled down to this:

1. Coke is healthy.

2. Coke will launch a brand this week that carries absolutely no calories so if you are settling down to a long session with Bacardi Black or Myers, this would be the best choice for your Rum and Coke, thus spake Peter Njonjo, the GM Coca-Cola EA.

Peter Njonjo (middle)

The Beef

In July, a consumer body in the US released a report claiming that Coke sold in places like Kenya contained much higher levels of a cancer-causing substance called 4-MethylImidazole (4MI).

Whereas in California, only 4micrograms of the 4MI are allowed in a normal 12-ounce drink, and to carry a cancer warning for any drink containing above that level, in places like Brazil, Coke was found to have 267mcgs.

Here's how different countries stack up:

The Riposte

Njonjo of Coke reckons that when we talk about additives, preservatives and so on, it will be important to understand the role of each.

For instance, while emulsifiers and stabilizers help the manufacturing process of soda, other additives are simply colours - imagine for example, drinking a clear beverage that has the taste of Fanta Orange. The colour is part of branding.

The much publicised 4MI, is but an every day by-product of heating food-grade carbohydrates much in the same way sugar heated in a pan turns brown.

This process is called caramelization and produces dark yellowish-brown colours.

"As we continue heating, there is a possibility that we get a different product like 4-MI," Philip Ndemwa, a researcher at Kemri told the bloggers.

According to Ndemwa, 4-MI is always produced in processes like cooking meat (that is why it turns brown), making Tusker Lager batches achieve an even colour and so on.

Looking Ahead

So going forward, Coca Cola will launch Coke Zero in the market next week.

It will carry out an education campaign to sensitize people on healthy living and disabuse them of the notion that Coke has too much sugar.

It is all a matter of Energy Balance, Peter Njonjo says. The number of calories that a Coke product contains will be highlighted and will possibly be accompanied by healthy tips on a number of calories burning activities.

Further stakeholder engagement with media, academia and so on will continue.

It's bottling companies have now adopted state of the art bottling processes that put bottles through two Elecronic Bottle Inspections in the filling cycle to determine if any impurity might have gotten into the product.

DStv TO RENUMBER CHANNELS, ADD BOX OFFICE

In Accra and in Nairobi tonight, DStv is set to unveil a new numbering of channels with related content being on adjacent channels - e.g. FTA channels like Citizen, NTV, KTN, K24 ideally following each other, while movies, Africa Magic and so on will all be regrouped to make it easier for viewers to navigate.

During the unveiling, Multichoice will also announce new High-Definition channels that have been added to its bouquets including Box Office which will be available for premium subscribers and where latest release movies will be shown before gradually being moved to the other bouquets.

A table laid out at the Golden Tulip Hotel in Ghana DStv event

The use of HD channels is meant to create more room for more content.

This will also allow for content of the same genre say romantic movies to be grouped together and so on.

Multichoice is moving aggressively to protect its turf as new challengers enter its African markets.

Tonight's launch is also expected to directly address issues of content including program repeats and dated movies that were sparked of by this Blog Post.

WHERE ARE GTV & SMART TV? DSTV COMPLAINTS NOT JUSTIFIED

While unconfirmed reports have it that the posters of letter in  Ghafla Kenya A Hilarious open letter to DsTv and Multichoice later went to Multichoice demanding that the company advertises with them, it is interesting that a rival platform was very keen to jump on the tweetfeed and FB comments generated to market itself and call for people to migrate to them, never mind a month or two ago they were under similar siege.

I've read the post and while some of the issues raised may be genuine, I think Kenyans also want too much for too little. That or rivals are now using trolls to malign other brands online.

Bottom line is, for those who remember embracing GTV and Smart TV, you do have to run a sustainable business model to survive and secondly, it is important to benchmark a brand against best practices elsewhere.

For starters, when it comes to international channels such as Discovery, E! Entertainment, Nat Geo and so on, these are pass through channels that re-transmit content as it comes without repackaging.

So the Discovery World and Nat Geo as you see them here is how they are seen on other continents.

Indeed, when the same issue was raised by DStv subscribers about repeat of marathons in South Africa, the matter was referred to Discovery Channel folks who responded as follows:

"There are usually marathons at the weekend on Discovery World which tend to work quite well.

We would like to give all viewers a chance to see the whole series if they miss the first or second episode hence the repeat of Biblical Mysteries series last Sunday.

The omnibus was repeated twice since different viewers tune in at 6am and at midday. It might happen that some heavy viewers will see the same episode more than once especially with mini-series marathons.

We appreciate the feedback and will take it into consideration when planning marathons on Discovery World in the future."

According to Multichoice, when it comes to acquiring these channels:

"Essentially, MultiChoice does not create the channels it broadcasts. This also means that we do not have direct editorial control over the channel schedules and content."

Secondly, on complaints about the content on channels like Africa Magic and Africa Swahili Magic: We are not producing enough local content that can be aired n these shows. There is no point in complaining about the repeat of TZ movies on Swahili Magic or Naija and SA movies and shows yet we are not producing our own content to compete.

Multichoice has in fact been pushing for people with local content to come forward it is willing to support it. 

Multichoice has two content producers: (Electronic Media Network) MNET and Supersport.

On each at least it has tried to assist in content development on the continent. MNEt has Africa Magic channels while Supersport now shows local football league matches.

Recently, the Multichoice Nairobi office was upgraded to a regional hub overseeing 10 countries as the company scales up the push for local content.

And as much as competition is good in the market place resulting in better products and pricing, at least Multichoice has been consistent.

Gushing over new entrants has seen GTV and Smart TV converts burn in the end only to leave DStv in the market.

So as far as reliability, the company still has reputational currency and will probably be trusted more than a newer flashy rival.

How the market plays out we are yet to see but wholesale criticism of brands without taking time to understand the business models behind them (GTV and Smart clearly showed the wrong market and pricing strategy will burn you) is disingenuous.

Kiptiness vs Wangusi for CCK's top job

The highly political and precarious position of the Director-General of the Communications Commission of Kenya is set to be filled after acting DG Francis Wangusi, CCK legal head John Omo and former CCK and Telkom Kenya lawyer Stephen Kiptiness were all short-listed for the job.

The previous CCK boss Charles Njoroge left in acrimonious circumstances after falling out with the board. It is suspected that powerful interests both in the telecommunications industry and in the Media conspired to see his removal for threatening their interests.

The post will be filled at a time when serious issues have to be addressed:

One, digital migration is about to take place and the billions at stake have seen the war over customers rise to a whole new level - expected to even go higher as Multichoice and Startimes Digital rush to roll out services across the country.

Simple mathematics - we have about 4million TV sets in this country. Each of those, theoretically, should have Digital set top box.

Set top boxes go for anywhere from Sh3000 - 7000. Working with the lower figure, 3000 by 4million sets....You get the picture.

Related, is the issue of frequencies - Njoroge fought with broadcasters because he sought to repossess frequencies that were issued under dubious circumstances in the first place and that media owners wanted to retain control of upon digital migration.

You see, one frequency yields 18 digital channels. The likes of Royal Media, Radio Africa and Nation Media Group want to retain control of these channels when they migrate but authorities have insisted that everyone will be allocated channels according to the content they can produce. A battle royale awaits the potential DG here.

Elections are also coming up and certain regulations, including those covering hate speech, the internet and social media are likely to be pushed so again the DG has his work cut out for him.

Not to mention, the issue of switching off bogus handsets and blocking unregistered SIM cards is also underway and again powerful interests will seek to sway the process.

Then the mother of them all, the issue of Mobile Termination Rates (MTRs). The last time CCK brought them down, Airtel unleashed a price war on the market that turned the market upside down and forced all other operators to bring their prices down too.

CCK has been seeking to bring these MTRs down further but telcos notably Safaricom and Orange have been against the idea.

That being said, who stands the best chance to be DG?

Francis Wangusi

Francis Wangusi (pictured right) has the inside lane - He has already been acting, and has, at least till now, not ruffled any feathers.

He is likely to be seen as safe and most likely lobbyists will push Information minister Samuel Poghisio, to appoint him.

John Omo who last time lost out to Charles Njoroge is on the short list but one would think he would have been chosen to act in Njoroge's absence but he was not. That is telling.

Stephen Kiptiness, is as sharp as they come, and is a look-you-in-the-eye straight forward kind of guy. He knows his stuff but the fact that he has been away from CCK for some time might work against him.

He was the Legal Head at Telkom Kenya and would probably make the best DG from the country's perspective.

As an outsider some things Kiptiness could probably be relied on to do is to come up with a proper spectrum allocation policy, at TKL he always railed against CCK for dragging its feet on this.

He could possibly come down hard on Safaricom being one of the TKL brass who believed that Safaricom rode on TKL's infrastructure to become what it became. But on the other hand, TKL and Safaricom had come to agree on some things, like the need to halt the reduction in MTRs.

All said, it is most likely Wangusi will take the job. Kiptiness could well be a future DG.

BARCLAYS PUSHES ATM, MOBILE BANKING

We speakin' billions!

Adan Mohammed wants you to use ATM's and do mobile banking to save on costs associated with visiting the branch to do transactions. That was the message the suave CEO gave at the investor briefing held at the Intercontinental Hotel to report the bank's half-year earnings for the period ended 30th June 2012.

The numbers were good. On the back of high interest rates, BBK raked in Sh6.3billion in profits before taxes for the six months to end of June. Compared to a similar period last year when it reported Sh5.3billion,  growth in this regard was 18 per cent.

It did this by holding costs down. BBK did not accept expensive deposits and therefore it did not have fork out large interest payments on deposits.

In the year, Adan informed investors, BBK did Sh40billion of new lending. Their loan book now stands at Sh101billion. Most of this is strictly prudential lending with the bank emphasizing risk management.

Indeed, room for growth is ample - the bank is capitalized to the tune of Sh27billion meaning theoretically it can lend up to 10 times that (Sh270billion) yet it has only put out Sh101bn.

BBK is now ranked third in profitability at the half-year mark after KCB (Sh8.5billion) and Equity Bank (Sh7.6billion). The bank lost its position as the most profitable in the country last year as aggressive expansion and customer recruitment at the two local banks yielded fruit.

To keep costs down, BBK is emphasizing ATM and mobile banking. One of the ways they have done this is by eliminating ATM transaction fees. 

They have also launched Hallo mobile banking allowing you to transact via mobile and this is a service you can register to from the screen of your phone without having to go to the bank.

Going forward, Adan said the continued imbalance between what Kenyans are importing and what they export is likely to put pressure on the shilling so in other words, the shilling could weaken in the coming months. 

ERICSSON/ALCATEL BATTLE FOR KENYA'S 4G NETWORK

Ericsson has shocked government types and telecom players by proposing to build a country-wide 4G network for free threatening to scuttle a consortium of the Safaricoms and Airtels of this world and equipment makers Siemens and Alcatel-Lucent that has won the right to build the network.

Ericsson had slept during tendering and missed out on bidding. Only after a consortium of 10 players (Safaricom, Airtel, Orange, Essar (yu), KDN, MTN, Siemens, Alcatel-Lucent, Epesi Communications and the Kenya government) won the tender did Ericsson wake up.

Essentially, the consortium, through a special purpose vehicle that has received approval from Treasury, is to set up an escrow account where the shareholders will deposit their contributions to the project.

The exact cost is yet to be established although a preliminary figure of US$100million (Sh8.4billion) had been floated for the first phase of the project.

The telcos will presumably also provide their masts and base stations under a shared-infrastructure model while the equipment makers will agree on how to roll out the network. (an initial agreement between Alcatel and Siemens was dismissed as unworkable as they wanted to halve the work essentially building a network that is half Alcatel and half Siemens. They are now said to be seeking a better working formula).

Ericsson now wants to crash the party. It is saying it can foot the bill for the entire project and repay itself over 15 years or so. It argues that rather than ask telcos and taxpayers to come up with cash for the project, it can bank roll the project and then operate the network.

Ericsson it trying to team up with one of the consortium members, Epesi Communications, which touts itself as an American outfit, although Google searches for it yield preciously little and is said to be fronted by a Kenyan going by the name of Munene.

Predictably, Alcatel-Lucent and Siemens are against this as they will stand to lose lucrative supply deals.


Africa being the fastest growing mobile market in the world has attracted all the major infrastructure companies from Ericsson to Siemens, Nokia, Alcatel-Lucent, Huawei, ZTE and so on.


Huawei and ZTE have suffered because they have very close relationships with two of the telcos in the country, Safaricom for Huawei and Orange for ZTE. As such, the other consortium members do not fancy them in the mix.

But this is the kind of issue that finds its way to parliament and suddenly accusations of government spending money when an offer to have the entire network built with no money upfront is on the table.

There is no word as to whether Ericsson's bid will be taken seriously or what their next move is but indications are that their offer has been rebuffed for now with the polite reminder that they did not participate in the bidding round.

Another unhappy camper is Safaricom. The listed telecom would have loved to roll out the network on its own but spectrum constraints cannot allow this.

It is also unhappy that KDN and MTN could use the new network to offer voice services according to people in the know.

Also, the network will be on an open access model meaning even those entities that are not part of the consortium can lease capacity on the network but essentially, it also means that all operators will have the same coverage countrywide when it comes to 4G.

4G's main beneficiary is video in the same way 3G is data and 2G voice. By 2020, it is expected that 5G technology will be rolling out with much of data traffic expected to come from smart devices like home appliances rather than phones and tablets. IPv6 will allow billions of devices to have their own IP addresses.

The escrow account for the consortium was to be opened this week.

THIEVING QUACK JOURNALIST UNMASKED VIA SOCIAL MEDIA

The reported Luke Githinji

A thieving quack who lifted an iPad at a BPO function recently was unmasked on social media yesterday.

After his picture was circulated to media houses and subsequently on the net, one Robert Alai, not known to mince words wrote:

Robert Alai ‏@RobertAlai

The iPad thief highlighted in this blog post is called Luke Githinji. His number is 0712978119 http://bit.ly/KxuJzI - RT Pls

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As of writing this post, there had been 29 retweets including by the Kenya Police official twitter account.

 Left is the picture he uses on Facebook. Given by his account, this must be when he graduated from the Kenya Institute of Media and Technology, yeah, I know you are asking (Where the hell is that?)

I don't know.

The man's motives aside, the bigger issue here that needs to be addressed is the growing armies of quacks who invade functions sometimes outnumbering guests and end up either stealing, extorting money, drinking themselves silly or basically making the journalism fraternity look bad.

Shown there is a screenshot of Mr. Githinji's Facebook page. 

He seems a recent entrant, or an introvert. He has 69 friends.

QUACKS

The business journalism field is the worst hit by this problem.

Nowadays, genuine reporters at a function will normally make up about 30 per cent, the rest being unknowns who give no value to the host and end up demanding favours for work not delivered. Some have become well known and perhaps it is time that the fraternity did what the political desks did some years back.

To hear it from veterans, two notorious quacks had taken to impersonating legit political journalists, appearing at functions and extorting politicians in other people's names.

THE UNMASKING

Then, social media was not around to unhood the likes of our friend Luke. The politicos decided to use another tactic. 

At different subsequent functions, camera men and photographers were asked to train their lenses on the two and make sure they got good shots. 

When they were sure they had enough footage, they put together a story to be aired and ran cautioning on two masqueraders roaming the town.

The two fellas promptly went underground.

BUSINESS PRESS, CLIENTS AND PR AGENCIES

There is need now, for action to be taken and it has to be done in concert with the three most affected parties, the business desks, clients they cover and the agencies who bring the two together.

A collaborative effort to unmask these quacks and circulate their pictures and profiles both to clients, and PR agencies and to the police if necessary is needed to clean up the industry and restore the good name of the business press.

Over to you!

SAFARICOM TAGS OGILVY, TELL-EM, APEX AND SILVER BULLET FOR PR ACCOUNT

Ogilvy Kenya, Tell-Em, Apex Porter Novelli and Silver Bullet have been shortlisted to pitch for Safaricom's Sh2million a month PR & Events account.

Gina Din CC which has handled the account for the last decade opted not to bid for it as CEO Gina Din-Kariuki focuses her attention on specialized international clients and also prepares to play in the Oil and Gas sector with her appointment as the local partner of CAMAC Energy, an explorer with several off-shore blocks in Kenya.

Head to head, Ogilvy seems to tower over the others given the accounts it handles, it personnel and the fact that its a Scanad brand.

It has big clients such as Kenya Airways, Kenya Tourist Board, UAP Insurance, Tullow Oil and KCB and some of its personnel like Catherine Karanja, Tony Kago, Esther Sserwanga, Duncan Ondigo and so on have several years experience in corporate advisory work and other client services.

Others like Henry Ndirangu and King'ori Choto are newsroom veterans turned communications specialists while Francis Ochieng' and Nick Thiong'o are ex-Gina Din CC staff and have worked with Safaricom in the past.

But without doubt the biggest question mark with be the exit of Ogilvy MD Okoth "JJ" Obado from the helm of the firm he has led since 2004. JJ who commands fierce loyalty from his staff is known for his style of letting his employees "work."

"When he gives you a job, he gives you a job," said one. Yet another: "He is a leader." 

That he will be exiting is one thing, that his replacement will be Nick Wachira, the outgoing Managing Editor of the East African will no doubt raise eyebrows.

Where J is praised for his people management skills, Wachira is not. In fact, the opposite is said to be the case and that he is difficult to work with. Nonetheless, he does get results having launched the Daily Nation pullouts, Smart Company and Money some years back, the Business Daily as first Managing Editor and now at East African.

The firm has had a very low attrition rate at the top (only Anthony Mwangi- previously Head of Clients Services and now Obado have left) and will be watched closely for any if at all, departures after this.

Tell-Em PR, associated with former Information Minister Mutahi Kagwe, has not been as visible as it used to be in the past when Emily Kaiga (now Head of Communications - Standard Chartered Bank) used to represent the likes of Nokia.

But it is still no pushover and its impressive array of accounts is testament to that - Visa, Intel, Brookside, General Electric, Chartis Insurance, Sameer, Pine Bridge Investments and so on.

It also gave Safaricom its current PR Manager, Ann Nderi.

Apex Porter Novelli is quite surprising in this list as it has tended to go for public sector contracts and has represented the Ministry of Planning, Kenya Census 2009, the East African Community, Unilever, USAID and so on.

Known as Apex Communications in the past it became a network partner to global communications firm Porter Novelli.

Silver Bullet on the other hand is no sleeper although it has lost some veteran names recently. It represents the likes of Coop Bank, Ecobank, Toyota, APA Insurance, Jetlink and so on.

It however lost the highly effective Lilian Nganda to Hill and Knowlton, a brand that has acquired some of the best upcoming PR minds recently, and Sylvia Luseno to Media Edge. Brenda Khaimia, another of the Silver Bullet girls left to join Blueprint.

It is surprising that some firms are not on this shortlist.

Hill and Knowlton, probably the best positioned to handle this job given it not only has two seasoned Safaricom handlers in Rodgers Wabito and Cedric Lumiti but it has done a much better job of replacing departures of the likes of Solomon Mahinda chose not to pitch.

It has in addition to Nganda, hired former Apex, AccessKenya and Scanad PR's Michele Anekeya and has a large pool of upcoming PR minds.

Equally impressive is Africa Practice with an illustrious list of clients such as Google, Research In Motion, Multichoice, Diageo, CNN and so on and a number of seasoned PR minds such as Joan Kiambati and Mukami Muriuki and has recently tapped the talents of Capital FM Business Editor Evelyn Njoroge.

GOOGLE GIVES iHUB SH28MILLION

Search-advertising giant Google has announced a Sh28million funding to iHub and KENET the former an innovation hub and the latter an organization that provides internet access for tertiary institutions.


iHub will use the money to expand its work with application developers who in turn may come up with innovations that enrich the Android platform.


KENET on the other hand will continue to "connect educational institutions with a private, affordable high speed Internet."


Both of course fit into Google's mission: - To organize the  the world's information and make it universally accessible and useful. 


In these parts of the world, information is either still snaking its way from print and handwritten materials to electronic format or has not even been documented yet.


A simple search of things associated with our cultures will yield little on the net whether on Wikipedia or on the web in general.


Applications, especially mobile applications such as those developed at iHub, tend to increase human interaction and therefore generate content. Google wants to organize that content.


Academic halls of course are a logical fit for Google as this is where information is of necessity, exchanged.

TULLOW STRIKES OIL IN KENYA

Tullow Oil has confirmed that it struck oil in its Turkana Block 10BB. The discovery was made last year but the company had said it would give a briefing on the progress in May.


The confirmation was done by President Mwai Kibaki. The Ministry of Energy will at 4PM give an press briefing on the same.


Even better, this is light crude oil as compared to Uganda's heavy crude that is usually solid at room temperature.


Tullow is the same company that discovered oil in Uganda. 



In stunning fashion, the fortunes of once vast and desolate wasteland thas is Turkana seem to be changing by the day.


In the same county, Africa's largest wind farm project is to be built to generate 300MW of power that will be transmitted to the national grid.


Geothermal potential is being explored with indications that we could get substantial energy there.


The massive LAPSSET project is set to pass there with rail, road and pipeline.


Tullow Oil shares were boosted by the announcement in London.

Tullow's exploration director Angus McCoss said:

"This is an excellent start to our major exploration campaign in the East African rift basins of Kenya and Ethiopia. to make such a good oil discovery in our first well is beyond our expectations and bodes well for the material programme ahead of us."

THE BIG ONE: KQ - TITUS NAIKUNI TO EXIT KENYA AIRWAYS

Titus Naikuni.

Titus Naikuni, the 6 foot 3 inch tall CEO of Kenya Airways is set to leave the company sometime this year, it has emerged. Reports indicate he could be headed for a career in politics with some pundits mentioning the Kajiado governorship as a possible next stop.


Naikuni, CEO since February 2003, reportedly will be succeeded by Mbuvi Ngunze, the current Chief Operations Officer who joined KQ in August last year.


Timelines are not clear but quite likely, Naikuni will steer the company's ongoing Sh21billion rights issue before making an official announcement.


Like Michael Joseph when he headed Safaricom or James Mwangi at Equity Bank, Naikuni is viewed as virtually synonymous with Kenya Airways and it is hard to imagine the airline without him at the helm.


But Ngunze comes with impressive credentials and the management team is quite vibrant. Ngunze is a Lafarge alumni having held various senior positions at Bamburi and Lafarge group.


As CEO Titus Naikuni has never been known to suffer fools gladly or have the patience for them. It is only until recently that Naikuni has eased up and relaxed somewhat and seems not to take things as seriously as he did before.


A member of the dream team of technocrats as PS Transport between 1999-2001, Naikuni served with among others Martin Oduor-Otieno, currently CEO KCB Group, Mwaghazi Mwachofi, the current Finance Director of the Aga Khan Agency for Microfinance in Geneva, Richard Leakey, Shem Migot-Adholla and Wilfred Mwangi.


Naikuni's departure comes at a time when the company has launched a 10-year business plan that will see it treble its fleet with an emphasis on Boeing 787 Dreamliners and Boeing 777s for its long-haul fleet along with 737s and Embraer 190s.


It will also seek to raise over US$3billion for purchase of aircraft beginning with the Sh21billion rights issue that will cater for deposits for its first Dreamliners set to be delivered over 2013/2014.


Boeing requires deposits for planes to be made 24-month ahead of delivery time.


Government and KLM have committed to taking up their rights amounting to 49 per cent while institutional investors are also said to have expressed strong interest. 


A successful rights issue will also shore up the airline's balance sheet allowing it to leverage it for borrowing from banks.


The airline is also said to be set to launch a regional airline, Jambo Jet, which will cater to a changing market that now features an increasing number of travelling businessmen as opposed to the tourists who have previously formed the bulk of its business regionally.


A cargo business has also been started as the airline seeks to capitalize on the flow of goods from the Far East into the African continent as well as Jomo Kenyatta International Airport's emergence as the busiest cargo airport in Africa after surpassing Cairo and Johannesburg.


KQ for those who know it has a simple business plan. It uses its regional flights to bring passengers from all over the continent and loads them onto long haul jets that take it to far flung destinations like Bangkok, Gouangzhou and the like. It then does the reverse bringing in travellers from around the globe and putting them in 737s and Embraers that take them into African capitals.


The airline plans to build the most extensive network on the continent making it the undisputed leader and use Dreamliners to take them to any part of the world.


For instance when its workers went on strike some time back, operations in West Africa, Nigeria, Cote D'Ivoire and the like were severely disrupted given KQ's grip on international air travel in the region.


Titus Naikuni is known for his biting remarks and sarcastic wit particularly when shooting down reporters' questions when he feels they are ill-informed or ambigous.


One time a reporter asked him when Pride Center, its training and simulation facility would open yet it was already operational.


"Pride Center is already open, in fact it is old, it needs paint."


Naikuni, 59, sits on several boards including Maersk Kenya, AccessKenya, East Africa Portland Cement and Magadi Soda.


One thing he was yet to do was to reform the corporate culture at the airline. Like Safaricom and KCB, some feel it is now time for a major restructuring of the airline to streamline the way it does business and align its personnel skills to better support its growth strategy.

KDN, TELKOM KENYA, KPLC CABLE CUTS DOWN INTERNET IN KENYA

Fiber cables

A road contractor has cut underground fiber cables belonging to Kenya Data Networks and Telkom Kenya near Jomvu seriously affecting internet services in Kenya. To make matters worse, KPLC dark fiber that many ISPs and telecoms use between Nairobi and Mombasa was also cut near Mombasa when alleged scrap metal vultures vandalized a pylon.

The result is that internet services have been intermittent as carriers scramble to seek alternative routes.

Currently, big carriers like Safaricom are relying on the government-owned National Optic Fiber Internet Backbone (NOFBI).

Telkom Kenya has already reportedly come back on line and KDN is said to have told clients it expects to be back up in about two hours time.

Players have renewed their calls for a bill imposing stiff penalties on vandals and careless road contractors who cut crucial infrastructure like telecommunication and power lines.

As soon as it is passed, telcos are said to be waiting to swoop down on contractors with a vengeance.

The disruption comes at a time when the country's outbound traffic is being channelled through Seacom because TEAMS was cut by a ship's anchor at the coast and is undergoing repair while Eassy is being repaired for a cut near Djibouti.

Also said to be affected was the Reuters Currency Dealing System at local banks which crippled trade with the Shilling exchanging at around 82.40 to the dollar.

Some banks reported downtime on their ATMs.

MOBICOM MEN WIN CMC BATTLE: MUTHOKA KICKED OUT

Peter Muthoka and Bill Lay

For Peter Muthoka, high noon came at 11am, at the CMC Industrial Area premises boardroom. At last it appears, the threat by Paul Ndung'u, the chairman of Mobicom, that he would finish Muthoka had come to pass. By 12 noon Monday 12, 2012, Muthoka had finally been kicked out of the CMC board.

When it came down to it, the Andy Forwarders man found only John Kivai in his corner. His last remaining ally, Richard Kemoli, balked just before the board meeting was called to order.

In case you've not been following it, CMC has been involved in bitter boardroom wrangles that kicked off with a coup early last year that jettisoned CEO Martin Forsters (40-years at the helm) and long-serving chairman Jeremiah Kiereini carried out by newly muscled shareholders Peter Muthoka and his allies Paul Ndungu and Joel Kibe.

Months down the line, Muthoka was himself toppled in another boardroom coup and replaced by Joel Kibe, CEO of Mobicom.

Since then, allegations and counterallegations, boardroom and courtroom drama galore and sensational revelations of impropriety, kickbacks, corruption and secret offshore accounts have dominated CMCs coverage in the press.

Its share is suspended from trading on the NSE and authorities had ordered the constitution of a new interim board with an independent chairman.

On Monday, the board met to nominate the new interim board.

Word has it that Kemoli, who also chairs the Bamburi Cement board, was told in no uncertain terms outside the boardroom that his neck was also on the chopping block - he could either resign gracefully, or be thrown out in the bloodbath that was to follow. The votes were already marshalled, and the die was cast.

Significant is that in the grand scheme of things, Charles Njonjo (whose business interests typically revolved around the triumvirate of Njonjo, Jeremiah Kiereini and PK Jani) now chose to ally himself with the Mobicom men, Paul Ndung'u and Joel Kibe, as they made their final assault to take over the ailing auto-dealer.

Till then, Kiereini, and by extension Njonjo, were thought to be in Muthoka's corner. Ashok Shah, the supremo at APA Insurance (now Apollo Group), was seen as a wildcard and in the event that Muthoka had managed to call the extra-ordinary general meeting he had attempted to last year, Shah would have been the one to tip scales in Muthoka's favour.

Muthoka at that time wanted Billy Lay, current MD, Andy Hamilton, Paul Ndung'u and Joel Kibe voted out of the board and in their place three new members including one Mark ole Karbolo (currently embattled chairman of East Africa Portland Cement - Are all these guys embroiled in drama?) appointed.

That move was defeated through the courts and the Capital Markets Authority.

During a series of meetings held between CMC and CMA, on February 11 and 12, it was agreed that a new interim board of three Capital Markets Authority-appointed directors and seven CMC nominated directors would be constituted.

CMA appointed Susan Wakhungu of Human Performance Dynamics - she was involved in the restructuring of Safaricom into the current Safaricom 2.0, Zehranabu Janmohammed - of Archer and Wilcock Advocates and wife to TPS Serena boss Mahmud Janmohammed (she also sits on the Standard Group Board). Also appointed was Dr. Joshua Okumbe, CEO Centre for Corporate Governance.

THE COUP

When it came to the CMC side of the bargain, Muthoka miscalculated. First, he thought he would have Kemoli in his corner bringing his votes to three. Then in the agenda, he expected that the three CMA appointed directors would join in in the selection of the seven CMC side directors.

But Bill Lay and his side had other ideas. They decided to start with the nomination of the directors first meaning the current 10 directors of CMC would vote. Kemoli was first axed when he was appraised of the situation and hastily scribbled a note on a piece of paper to the board announcing his resignation.

Going into the meeting, a list that excluded Muthoka and his partner at Andy Forwarders, John Kivai, was proposed.

Ashok Shah of APA seconded it. The matter was put to vote and Muthoka and Kivai lost 7-2.

They stormed out with Muthoka threatening that it was not over yet and he would see them in court.

ANALYSIS

At the end of the day, if Muthoka knew what was good for him, he should have quit this battle a long time ago and walked away with the hundreds of millions he has made from CMC.

He however bet wrong. His trump card was that along with Johnstone Muthama, they are the main financiers of Kalonzo Musyoka's quest to become president.

But hoping to become president and being a sitting president are worlds apart.

You see, Muthoka was indirectly fighting a sitting president. 

Paul Ndungu and Joel Kibe, are business associates, some say frontmen, for Jimmy Kibaki and by extension the first family's business interests.

At every turn, Muthoka has pulled seemingly spine-bending blows to his adversaries, the tide has inevitably turned.

INVESTIGATIONS

With regard to three off-shore accounts, the CID and the UK Serious Fraud Office (SFO) are investigating. Likely to come under their cross hairs are the Jaguar and Nissan Diesel Brands which are said to have been paying kickbacks into these accounts.

JG Kiereini, the late PK Jani, and Charles Njonjo, former CEO Martin Forster and the late former company secretary of CMC will also be in the spotlight.

Muthoka's case will now be investigated by the CMA to ascertain his culpability in CMCs lost billions.