Mobile phone firms swap dealers in new market wars

Other than earning commissions for every SIM card sold, the dealers are also paid a residual percentage of the total spend by a subscriber on the line or number.

All the three operators apart from Essar’s Yu pay their dealers 10 per cent of the airtime spent by a subscriber during the lifetime of the SIM card in residual commissions.

Commissions paid for airtime sales vary among the operators and the information is public.

Telkom Kenya has recently announced a change in dealership plan, trimming the number from 300 to 56.

The telecom firm requires the dealers to have Sh5 million in working capital, open four branded shops and a network of eight direct agents who can transact business worth Sh20 million per month.

Mickael Ghossein, the company’s chief executive, says reorganisation of the dealers should enable Telkom to double its second quarter revenue.

Telkom earned Sh2.3 billion in revenues in the first quarter of the year, down from sh2.7 billion in the same period last year.

Mr Ghossein said the revenue growth projection is supported by the ongoing proactive enhancement of Telkom’s GSM and wireless coverage as well as diversification of product and service offerings to customers.

“I have signed a deal with Ericsson for enhancement of our GSM network. This should guarantee our customers’ unmatched quality of voice and data services as we mark our second year in Kenya,” he said.

“Customers will soon be able to sign up for post-paid and SIM swap services from our preferred partners countrywide,” Mr Ghossein said during a meeting with the 56 dealers.

Telkom has announced plans to launch its money transfer service Orange Money in Kenya as well as its 3G services in the fourth quarter of the year.

Mr Ghossein says the twin plans should help boost revenue growth for dealers while offering backward and forward linkages to individual and corporate customers.

Orange is also planning to boost its wireless services by introducing trendy and versatile CDMA handsets that will enable customers access the internet, email and other services that are currently only available to customers on the GSM platform.

Telkom Kenya plans to invest between Sh10 billion and Sh12 billion on its network, concentrating investments on building its mobile data network, CDMA and its fixed line segment.