Altech Group Executive of Converged Services Tim Ellis refuted reports that the South African technology firm was planning to exit the region, as it did recently from its West African operations.
NAIROBI, Kenya, Oct 4 – Telecommunication service provider Altech KDN has said it intends to stick with its East Africa operations and grow the Kenya business further through partnerships.
“There is no intention to get out. The intention is to bring in another partner to grow the KDN business further,” he said.
The firm is currently consulting 20 local and foreign firms to partner with and will cut the field of prospects further to reveal its pick in the next three to six months.
Ellis said the firm is also trying to regain business it lost with Safaricom, one of its biggest clients two years ago, as it moves to boost its local operations.
“In hindsight that should never have happened; we should have made sure that we retained Safaricom. We will continue to engage Safaricom and we are working hard to win their business back,” he said.
Ellis explained that both firms fell out over a disagreement on use of fiber, which Safaricom wanted to provide on its own, hence creating competition for KDN in one of its core business areas.
KDN has been in the headlines for a lot of unfavourable reasons lately, especially following the retrenchment of 51 employees in a bid to reduce its cost base.
This move provoked fears that Altech, which owns 60.8 percent of KDN, was looking to pull out of its East Africa operations.
Altech is to sell off 75 percent of its shares in its West Africa unit.
“In West Africa Altech had a plan to exit the region within four to five years because when we entered the market we had a partner that is now interested in taking our share. We had pioneer status and tax breaks that we could leverage at the time, but now its time to leave, with market dynamics changing,” Ellis explained.
The JSE listed firm blamed losses incurred in Altech’s operations in East and West Africa on lower operating profits in this year’s interim results.
For its half year financial results for the six month period ended 31 August 2012, the Group posted a loss of R485 million (about Sh4.8 billion) and a 6.8 percent increase in revenue to R5.157 billion (approximately Sh51 billion).
Altech launched a tier 3 data centre in Sameer Business Park last September, as Altech committed a $20 million capital investment over the next three years in the data centre.
So far, Altech has invested over Sh3 billion in the Kenyan market.
