Telkom Kenya invests in GSM networks

May 9, 2008
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NAIROBI, May 8 – Telkom Kenya Limited has said that it has no intentions of waging a tariff war with other mobile phone operators in the country.

Telkom Kenya CEO Dominique St Jean told reporters Wednesday that instead of competing with other operators to offer the lowest tariffs, the company was seeking to provide connectivity services to the market, which he noted is underserved.

He said part of the strategy would be to focus on customer experience by offering simple and convenient offers to giving excellent customer service.

St Jean’s remarks came a few days after Information Permanent Secretary Dr Bitange Ndemo projected that Kenyans could pay as low as Sh2 to make mobile phone calls beginning 2009.

Ndemo pointed to the entry of Econet Wireless in July, which will bring mobile service providers to four and the laying of the terrestrial and under sea fibre optic cables, is expected to bring down costs to affordable levels for all Kenyans.

St Jean spoke after signing a Sh8.9 billion agreement with handset manufacturer Ericsson for the countrywide roll-out of the much-anticipated Global System for Mobile (GSM) network, which would allow Telkom to provide high quality voice and data services.

The roll-out is set to start in the October 2008 in the investment that will in the long term cost an estimated Sh19 billion.

He said the GSM technology which would complement the fixed lines would in turn advance the telecommunication industry in the country.

Noting that the firm is now offering a wide range of services such as wireless, Code Division Multiple Access (CDMA) and fixed lines, St Jean revealed that their intentions was to diversify its portfolio to include all types of telecommunication services.

Under the terms of the agreement, Ericsson will immediately commence the turn-key launch of all core GSM network components, including Base Transmission Stations (BTSs) and Switches.

Upon completion, Ericsson will eventually transfer the technology back to Telkom.

While commenting on the investment St Jean observed that the supplier’s experience in Africa and in the expertise in launching start-ups was ideal to help benefit from leading technological solutions.

“The agreement reflects our strong commitment to deliver enhanced communication experiences to customers,” St Jean added. 
 
The government has a 49 percent stake at the telecommunication firm after France Telkom acquired a 51 percent shareholding in Telkom Kenya in December 2007.

Thus the investment is one of the majority shareholder’s objectives and mandate to reorganize, enhance and return Telkom to profitability in the next few years.

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