Mergers, Acquisitions and Financial Results

Telkom Kenya has lost a whopping Sh120 billion in the last five years alone, Transport and Communication Minister John Michuki revealed last week. The massive losses were incurred through diversion of local and international calls. In addition it loses between Sh200 and Sh300 million each year through vandalism on its lines and other equipment. Michuki vowed to crack down on Telkom staff involved in scams. He instructed that those caught be summarily dismissed as well as being charged in court.

"Since my appointment, I have been astonished by discoveries about (the) dishonesty of (a) certain cadre of staff, particularly technicians."

He warned the public against vandalising telecommunication facilities, saying apart from being costly, it results in disruption of services.

Destruction of telecommunication installations and lines also frustrates the corporation’s handling of emergency situations.

"The company, I am informed, loses between Sh200 and Sh300 million annually to vandalism. This money could be spent in (providing) extension services in the rural and remote areas of this country."

He said apart from diversion of lines by dishonest staff other problems include abuse of office. He gave the example of cases where staff illegally traded company equipment and facilities and use of equipment for purposes not covered by the licence. Michuki cited the illegal use of VSAT facilities for purposes not covered by the licence. He announced he had instructed the Communications Commission of Kenya (CCK) which regulates the communications sector to ensure any equipment being used illegally were confiscated.

Michuki said management changes at Telkom are aimed at making it fully commercialised and capable of competing in a liberalised environment apart from enhancing its earning capacity and revenue in-flows."It is now evident, for example, that a lot of calls previously diverted are now coming through the system and billed accordingly," said Michuki.

The minister said issues such as inaccurate billing, line diversions and slow response to customer needs must be urgently addressed as customers are increasingly aware of their rights and the available alternatives.

Michuki said a globalised economy calls for a modern, efficient and affordable telecommunication system and Kenya cannot hope to participate effectively in the global economy if its infrastructure lags behind.

He said the pre-paid service was a step in the right direction particularly after taking into consideration that 1.5 million customers of Safaricom and Kencell are already on this service. Telkom Managing Director John Waweru said 150,000 lines of the Pre-Paid Service were immediately available with 900 already allocated. He said the service will initially target residential customers in various exchange areas.

The East African Standard