Orange to grow client base via SMEs, Internet

Telkom Kenya hopes to double its Orange mobile network subscribers in a year by targeting small and medium enterprises (SMEs) and focusing more on provision of Internet and video services.

The company, on Wednesday, announced it had enlisted one million subscribers with slightly over 700,000 being active users, said Dominique Saint-Jean, Telkom chief executive.

“We are looking to capitalise on SMEs for growth since the potential is not fully tapped,” he said.

Other than Orange Mobile, the company also offers Orange Fixed Plus (a CDMA wireless service) and Telkom Fixed Line which have a combined figure of 600,000, bringing the total number of subscribers to 1.6 million.

“Our target in the coming year, in mobile, is a market share of 20 per cent. One million represents probably a third of it,” he said. The company, however, could not say whether it will have managed to break even by the time it announces its first financial results since the acquisitions.

Mr Saint-Jean said a key factor to the outcome would be the heavy investments the company had made in setting up the mobile infrastructure and reorganising staff. Telkom will invest Sh8 billion this year in its businesses that include Orange, CDMA, and fixed line networks, as well as data services.

Telkom Kenya rolled out its mobile operation in the country eight months ago and says it has covered 25 per cent of the country’s geographical area, and 60 per cent of the total population.

This came after the acquisition of 51 per cent of the company by France Telkom, which brought in a new management team with the mandate of returning the company to profitability.

The company has adopted the France Telecom’s global model of offering converged services such as voice, internet (data) and video in one bundle, making them more affordable to users.

Broadband revolution
Mr Saint-Jean said growth in the data market would pick up with the landing of the fibre optic cable, expected to connect the country with the outside world. The country expects two submarine cables, Seacom and Teams, to be operational by the end of June this year.

Telkom Kenya has invested in Teams, an acronym for The East African Marine Systems. The cables are expected to unleash a broadband revolution in a region where telecoms have already had a huge impact on life.

Mobile operators already provide a wide range of services, including money transfer and wireless Internet on 3G platforms. Industry executives expect increased broadband capacity to be the next big thing in east Africa’s biggest economy, and are positioning their firms for a slice of the data market.

However, a number of players in the telecommunication sector says that technology alone won’t boost the uptake of internet or create job opportunities if key issues such as access to electricity , and content, are not addressed.

The managing director of Kenya Data Networks, Kai Wulff, said there is need to sensitise the public on how they will make use of the infrastructure to generate income using local content.

Bottle necks
Other bottle necks are the access to IT tools such as computers and the last mile connection (technology to connect end users to other telecommunication infrastructure).

Saint-Jean said the telecoms sector in Kenya was well developed, adding that the government had the scope to look into taxes and other regulations to boost the industry.

“You never sleep on your laurels... if we maintain the fiscal equation, it is a limitation. Other barriers are in calls between networks,” he said.

Kenya has three other mobile phone services in Safaricom, Zain, and Yu. Safaricom dominates the market with a share estimated at 77 per cent.

To date, the company has invested over Sh10 billion in infrastructure and maintenance. It attributes its growth in the subscriber base to a number of factors, among them the handset offer it has been promoting since its launch.

The other strategy the company expects to boost its subscriber base is strengthening its partnership with its agents and distributors by offering them better commissions on sales of airtime and equipment, as well as offering reward to best performing distributors and their agents.