New Celtel boss faces tough job

The new boss of Celtel Kenya faces the huge task of turning around the country’s second mobile phone provider, hit by a declining market share and numerous management shake-ups.

The Celtel Kenya head office in Nairobi.

The Celtel Kenya head office in Nairobi.

Mr Rene Meza began work as the new CEO for Celtel Kenya, just weeks after a massive exodus of senior management, triggered by the firm’s declining foothold in the lucrative mobile phone market. In the early years of this decade, Celtel then called Kencell, had a 50-50 share of the market with its rival Safaricom. Today, Safaricom commands 80% of the market with Celtel scrambling for the rest with Telkom Kenya. Mr Meza will be expected to reverse this decline and increase profitability.

While Safaricom makes hundreds of millions of dollars in annual profits, Celtel Kenya’s accounts have been made public only twice in its eight year history. A couple of years ago, Celtel Kenya made a profit of Kshs1.2 billion (about US$18 million). The following year, profits tumbled to Kshs64 million (approx $1 million) and that was the last profit announcement by the firm.

Mr Meza, a Paraguayan, has been seconded by the Zain Group of Kuwait, which owns substantial shares in Celtel. Mr Meza previously headed Tanzanian mobile phone operator, Millicom Tigo. While introducing himself to the press, Mr Meza announced that Celtel will spend Shs25 billion ($385 million) on expanding its network in coming years. This, analysts say, will put Celtel in a better position to cope with the entry of two new mobile phone operators into the Kenyan market in coming months.

Econet Wireless plans to launch mobile phone services in the country before the end of the year. Telkom Kenya is also set to increase its investment in the mobile phone sector as its land line business succumbs to technological changes and rampant vandalism of cables.

Celtel Kenya’s main shareholders are the Zain Group of Kuwait and Sameer Investments, a local holding company. The Zain Group intends to shift its Africa headquarters to Nairobi, proof that the Kenyan operation requires greater hands-on management.

One Response

  1. […] – bookmarked by 4 members originally found by SummonerDagger88 on 2008-11-15 New Celtel boss faces tough job – bookmarked by 2 members originally found by […]

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