NAIROBI, Kenya, Jul 29 – The landscape of the local telecommunications industry is headed for major changes following Telkom Kenya’s confirmation that it had entered into a partnership with the country’s largest mobile telecommunications dealer, Mobicom Group.
Mobicom has previously controlled slightly more than 10 percent of Safaricom’s dealership business amounting to Sh5.5 billion per annum, for the last nine years.
“This partnership seeks to provide ‘Orange’ with an enhanced distribution network that matches the intense area of products and services that Orange has to offer in this market,” said Telkom Kenya boss Mickael Ghossien of the deal that takes effect on August 1.
This announcement puts to rest speculation that the dealer was entering into a distribution pact with Airtel, the new owners of Zain Kenya but it is also a big blow to Safaricom with which the firm terminated its contract on July 20.
The new arrangement, the Chief Executive Officer said, would complement Telkom Kenya’s infrastructure which has cost them Sh19 million to improve its Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA) coverage, in the last two years and enhance their service delivery to the Orange customers.
Mobicom has a distribution network of 42 outlets, 425 staff and more than 100 motor vehicles and motor cycles across the country. It also covers 85 percent of Kenya’s population which should provide a competitive edge to the integrated communications provider.
“The partnership will not only improve the availability of Orange products and services but also ensure adequate reach of telecommunication services to more citizens in this country,” Mr Ghossien said.
On his part Mobicom Group Chairman Paul Ndung’u said the strategic contract that was a culmination of negotiations running into three months, was not motivated by money but the desire to grow its business.
“We have made a business decision based on the strength and opportunities that Telkom presents. Telkom Kenya is the only network that offers convergent services be it CDMA, fixed, wireless, data and also video,” Mr Ndung’u said.
He expressed confidence that their expertise and technical capacity would help the operator, where the government owns a 49 percent stake, to transform into a major telecommunication firm in Kenya in a few years.
“Since we started this business about 10 years ago, we have changed the way business is done bringing a lot of energy to the rest of the dealers and this is what we are bringing to Telkom. We see a bright future for our two companies,” he said.
Mobicom will work together with Telkom’s 56 regional dealers who were retained after the firm slashed the number from 400.
The distributor’s Managing Director Joel Kibe expressed confidence that the continued penetration of mobile network in the country provides immense opportunity for them to expand their business.
“We are not entering this market to entirely take the customers who are already on board; we have another area that is virgin and which needs to be covered and that’s where we are heading to,” Mr Kibe said.
With the backing of this national dealer, it remains to be seen what impact Telkom Kenya, which plans to roll out its 3G and money transfer services in the next six months will have on the market.