KDN chief executive officer Shahab Meshki says the company has lined up a number of measures to see it regain lost ground in the data market. Photo/File
What you need to know:
KDN, like the rest in the industry, has been leasing Internet capacity to customers such as banks and telecoms firms on a monthly basis, but it will now meter users.
The model, the foreign-majority-owned firm says, will help manage its communication budgets based on actual usage as opposed to the size of the leased pipe (bandwidth).
The move is seen as an effort by its new owners, Liquid Telecoms, to recover lost ground in the data market.
Kenya Data Networks (KDN) will charge Internet subscribers for what they have used, as it fights to claw back market share in an increasingly competitive environment.
KDN, like the rest in the industry, has been leasing Internet capacity to customers such as banks and telecoms firms on a monthly basis, but it will now meter users.
The model, the foreign-majority-owned firm says, will help manage its communication budgets based on actual usage as opposed to the size of the leased pipe (bandwidth).
The move is seen as an effort by its new owners, Liquid Telecoms, to recover lost ground in the data market where players such as Wananchi Group and AccessKenya have made inroads and edged out KDN as the top player.
Shahab Meshki, the KDN chief executive officer, told Business Daily that other measures to reclaim its lost market share are expanding its product portfolio to include video and voice and upgrading its switches to improve the quality of its network.
“I am confident about our current shareholders’ vision and where they want to take this company. Since Liquid came on board they have spent approximately $10 million which has helped us sort the network challenges we had,” said Mr Meshki.
He said the firm was still working on the technical aspects of the new billing model, especially how they will calculate the usage.
He added that the new billing will provide smaller Internet service providers (ISPs) a competitive edge in the market currently dominated by big telcos offering both wholesale and retail services.
According to the latest data from the Communication Commission of Kenya (CCK), KDN’s market share dropped to 23.4 per cent (21,377 clients) in the year to March from 30.2 per cent (24,094 clients) the previous year.
The firm slipped to the second position after being overtaken by Wananchi Group (35.4 per cent).
New capital
KDN reported a drop in revenue from Sh3.2 billion to Sh2.1 billion for the six months ended August 2011, while operating profit fell from Sh657.2 million a year ago to Sh12.6 million.
Liquid Telecom owns 80 per cent of KDN after buying a 60.8 per cent stake from South Africa’s Altech and 19.2 per cent from businessman Naushad Merali. The sale was driven by its quest for new capital to boost its operations.
The firm said it also intends to offer Voice over Internet Protocol (VoIP) and increase its offering of telepresence facilities, a move it says has been made possible by the merger of KDN and Swift Global after the buyout.
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