Zain, Nokia sign employee swap deal

• Pact comes with the transfer of management of mobile operator’s network to Nokia

Its success could offer Zain insights into new outsourcing opportunities for enhanced cost management in the highly competitive telecoms market.

For Zain, the biggest premium is that the deal has the potential to ease its access to cutting edge technologies such as 3G capacity to deepen its foray into the emerging wireless internet market and improve the quality of its network, which has been declared Kenya’s clearest and most reliable.

For Zain, which has capped nearly 10 years of operation in this market, the move presents the opportunity to re-evaluate its product offering and emerge from the loss-making territory where it has stayed in the past four years.

Zain Kenya’s revenues dipped marginally during the first nine months of 2009 to stand at $117 million compared to $121 million during the same period last year, according to the group’s latest results posted on the internet early this week.

The firm also lost subscribers but maintained its market share despite the entry of two new players in the market — Essar and Telkom Kenya — as well as the continued dominance of the market by Safricom.

Zain has 2.1 million subscribers compared to Safaricom’s 14 million, Essar’s 800,000 and Telkom Kenya’s 1.8 million.

The staff deal with Nokia Siemens will see the infrastructure provider manage Zain’s network for five years.

It places the mordernisation and management of Zain’s 3,000 multi-vendor mobile network sites in Kenya, Tanzania and Uganda in Nokia Siemens’ hands.

Zain has a combined customer base of nine million in the region.

Nokia Siemens Networks described the deal as the biggest multi-vendor outsourcing case in the region and one of the first supplier swap managed services deals of its kind in Africa.

As part of the agreement, approximately 350 Zain employees who work on network operations in the three East African countries are being transferred to Nokia Siemens Networks.

Existing contracts

Terms of the transfer are expected to remain similar to existing contracts and will be backed with development and training in the latest wireless technologies.

Chris Gabriel, CEO of Zain Africa, said he was confident that the outsourcing agreement will have a far reaching impact on the company and its customers.

“Choosing Nokia Siemens Networks to help operate our networks in East Africa fits perfectly with our ‘Drive11’ business objectives of improving efficiency and the quality of our networks and operation,” he said.