Two Kenyan companies get to grips with the new business model

Top Story

The steady fall in the value of voice as the central revenue stream of the telecoms business is beginning to impact on the sector in Africa. The clock’s also ticking on the end of rapid mobile subscriber growth in many African countries. With wider competition and the introduction of VoIP removing the protection from international call revenues, traditional telcos at last are beginning to think about re-shaping themselves. The rise of broadband and cheaper wireless delivery are tempting the previously sceptical to consider bold moves towards triple play or even quad play (that’s the one with mobile thrown in).

Some of those seizing the new business model are old-fashioned telcos seeking to re-invent themselves in ways that will make a break with their inglorious past. Others are new entrants seeking to find a significant market share that they can hold and defend. In this week’s Top Story Russell Southwood looks at two Kenyan companies that are going through this process.

With the arrival of unified licences in several countries on the continent, there is now more space for everyone to be doing everything. But the central business dilemma remains. Can a mobile company become a vertical player across every different market? An ISP? A fixed wireless player? If they do this successfully, then will they have simply become vertically-integrated players like the much despised incumbent telcos? In insecure markets, the powerful look to establish unassailable positions for themselves as dominant market players.

For the “small guys” like ISPs the future looks distinctly cloudy. Unless they can carve themselves out a niche position, their commercial future will be threatened. If the winners are those that already have a significant customer base, then being an African ISP in most countries is not a good place to start from. Therefore for most it will mean a retreat to the high-value ground of corporate markets where “bespoke” rather than “call-centre” service will win them a place in the future.

In the two articles below, we look at Jambo Telecom, Telkom Kenya’s bright and shiny new subsidiary and the progress of KDN in shaping its ambitious commercial strategy both in Kenya and within the region: