Of Zain, Bharti Airtel and Indian MNCs in Kenya

So MTC Kuwait, trading as Zain, is flipping its Africa operations to Bharti Airtel of India? If the deal goes through, and we shall know by March 25th, then the metamorphosis of Kenya’s second largest GSM mobile network, by subscriber base, will have undergone yet another momentous change.

Starting off as Kencell (jointly owned by Naushad Merali’s Sameer Group and Vivendi), part of the company was then sold by Vivendi Universal of France to Celtel BV, then promptly re-branded Celtel. That was in 2004. Celtel continued with many mistakes that Safaricom capitalised on. Dealers were unhappy, marketing and advertising did not touch the Kenyan soul (many of them were cut-n-paste pan-African ads which did little to “talk” to Kenyans), and a high employee turn over, especially at the executive level did not instill alot of confidence in the business. Interestingly, the most recognised CEO in Kenya is Michael Joseph of Safaricom, who has been at the helm since inception.

Almost a year later in 2005, MTC of Kuwait came knocking with some serious petro-dollars, a whole US$3.4bn and bought out Celtel International with all its network assets, including Celtel Kenya. The network later went on to be re-branded as Zain, in line with MTC’s international branding policy. The story has not ended yet, as we await March 25th when Bharti and MTC will emerge from the boardroom.

The journey has been long and arduous, as Zain’s number 1 nemesis and market leader, Safaricom, overcame teething problems in the early years to streak way ahead of the competition. Safaricom simply studied what the people wanted, capitalised on Zain’s simple mistakes, like charging a fee for any recharge voucher (since discontinued) and basically connecting with the ordinary Kenyan who was being introduced to mobile telephony, or any form of telephony for that matter, for the first time. Safaricom quickly cut an image of a “mwananchi” (citizen) conscious company, while Zain, then Kencell, was seen as elitist and playing to the corporate theatre. This was to set the battle field dynamics that played until the other two late entrants, yu, an Essar Telecom network, and Orange, a France Telecom network came in. Safaricom by then was light years ahead in terms of innovation, products (especially M-Pesa money transfer), mass subscriber base appeal, philanthrophy, network coverage etc.

It will be interesting to see how Bharti Airtel of India deals with the Zain brand, an early starter turned laggard. Bharti is no push over, it is India’s largest integrated telecom company in terms of customer base. They offer mobile services, fixed line services, broadband & IPTV, DTH, long distance and enterprise services. Globally, Bharti Airtel is the 3rd largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom. In India, the company has a 24.6% share of the wireless services market, followed by 17.7% for Reliance Communications and 17.4% for Vodafone Essar (part owned by Essar Telecom, operating in Kenya as yu). Are the Indians coming?

Will Bharti start by re-branding Zain? Perhaps this time to Airtel (the brand they use in the largest GSM network in India?) How do they address subscriber apathy despite great tariffs, well built network, and competitive products e.g. Zap money transfer? How do they address the distribution chain?

We can only wait and see.

Zain, Orange, Safaricom – Tariff Wars

People, the tariff wars are here! Zain fired the first salvo by asking us all “Sain” minded people to “Vuka 8”. This means you “vuka” to Zain and make 8/- per minute calls to ALL, repeat ALL networks. You are firmly in control now. You decide.

Not be outdone, Big Brother Suffer-icom, sorry Safaricom, shot back with a weak, mee-too rate of 5/- per minute from 10pm – midnight and 2.50 per minute from midnight to 6am ONLY on Suffericom, sorry Safaricom to Suffericom, sorry Safaricom calls. I hope nobody will make the mistake of waiting for these unGodly hours to call me. Have you noticed that Big brother never tells you how much you suffer when you make a call to another network? If you new you would go inZain, sorry, insane.

New kid on the block, Orange, is rolling out funky shops, funkier adverts and stuff. Their tariffs are not very impressive either, just so-so. Does anyone have an Orange GSM phone? What’s their network like? These are their pre-paid rates.

Family and friends — 3.50
Orange mobile, Orange fixed plus, Telkom fixed — 7.00
Other networks — 14.00
SMS local (all networks) — 3.50
SMS international — 10.00

But, their data services are worth looking at. Go here and pick an Orange

Back at Essar House, where the Econet lives, all is quiet, but am sure they are soon going to kick up a big dust storm. We are waiting!

Internet – Safaricom3G, Zain, KDN, Infinet, access@home

Things are truly heating up in the Internet access front. Not to be outdone by the mobile networks, AfricaOnline through their product, Infinet, has launched a competitive pricing scheme. They claim you can now get internet access at 5/- per MB. Translation, you purchase 100MB bandwidth for 500/-. This is in direct competition to Safariom 3G which is unit priced at 8/- per MB, and Zain which is unit priced at between 8/- and 16/-, depending on the bundle you sign up for.

AfricaOnline go ahead and load you with equipment cost @KES. 8,120/-, external antenna @ 8,000 + VAT (if required – they will do a signal test first in your premises), installation charges @ KES. 3000 etc. I got tired at this point, feeling as if they were punishing me for wanting to use their service. Still its a great service soine they guarantee (whatever that means) that you shall get the bandwidth youpay for.

Elsewhere, Econet is set to enter the market with a 3G network. The operator had better be on air by November. “We intend to have a well managed and reasonably priced package for our customers. The technology is designed to enable mobile operators to offer its users a wide range of more advanced services including high speed data, while achieving greater network capacity though improved spectral efficiency,” said the firm’s Managing Director Michael Foley. Underline high speed data. Mr Foley we are waiting to put your words to test.

AccessKenya launched their access@home product at the Jockey Club. Their website has alot of elaborate prose on the service. I am watching their product with alot of interest.

Not to be left behing, KDN are laying fibre all over the city. I was pleasantly surpised to learn that the residential block I live in somewhere in the city is all cabled up. Actually they want to terminate their fibre cable at the gate house, and run more cables to the four apartment blocks. The customers then get a router where the cable is terminated. Cost 5,220/- per month for 128/256kbps shared. Repeat, shared. At least these guys are honest. Am waiting.