Kenya: Essar Cuts Ties With its call centre provider

Mergers, Acquisitions and Financial Results

Mobile operator Essar Telecom Kenya Ltd operating as yu, has terminated its contract with its sister firm Aegis Services Kenya Ltd, raising anxiety for more than 70 customer care employees over their jobs.

The operator has instead opted for Horizon Contact Centre to handle its call centre services with affected employees being asked to reapply for their positions.

This comes at a time when heightened competition, which has seen mobile tariffs fall to as low as Sh1 per minute, coupled with the enlisting of subscribers with low disposable income has seen the average revenue per user (ARPU) drop to record lows.

Aegis, in its communication to employees, says its contract had been terminated by Essar Telecom and hence has been forced to move out of Kenya. "The business has been awarded to a new service provider. As a result Aegis has been given notification that they were not the successful service provider," said a communication to employees.

Some of the staff, whose contract expires on February 28, 2011, told the Daily Nation that most have not been recruited by Horizon, while those who have been taken in will receive nearly half pay of what they have been earning.

When contacted, Essar Telecom Kenya country manager Atul Chaturvedi said that Aegis along with three other local Kenya operators were recently evaluated for call centre business with Horizon Contact Centre emerging victor. "Aegis, like any other business organisation, assessed their business plans and have expressed their intention to withdraw their services in Kenya," he added.

He, however, refused to discuss salary issues raised by employees, saying that Essar Telecom has no role in deciding the contractual terms of the agents who work on their assignments.