Customers afraid of Telkom past

Telkom Kenya yesterday announced, yet again, the impending launch of its GSM mobile phone service to compete with Safaricom and Zain.

However, Kenyan subscribers didn’t show excitement at the announcement and Telkom’s French owners must be analyzing the subdued reaction with great anxiety.

From having a legally guaranteed monopoly on telephones and internet, Telkom Kenya is a pale shadow of the former Kenya Posts & Telecommunications Corporation.

The company is ranked third place after Safaricom and Zain in the telephone sector. In the ISP market, Telkom faces stiff competition from Wananchi Online, Access Kenya, Africa Online, UUNet and others.

When Telkom was a monopoly, Kenyans had to wait three years to get a telephone line. This created fertile grounds for unscrupulous engineers to solicit bribes in exchange for a quick connection. Even then, there was no guarantee that the lines would work. Whenever they broke down, it would be days – or weeks – before a group of harassed technicians showed up to fix the problem.

The tendency to redial endlessly became a peculiar Kenyan habit because it was the only way of making a call across Telkom’s land line network.

All that is water under the bridge. In 2006, Telkom launched a wireless CDMA network. The company is also an internet service provider (ISP) with significant penetration in the dial-up and cybercafé business.  Yesterday, Telkom CEO Dominique Saint Jean announced that they are rolling out their GSM network later this week.

France Telecom, which bought a 51% stake in Telkom Kenya, has vowed to revamp the Telkom brand and restore the company’s status as the number one telecoms provider in Kenya. To be fair, the Telkom Wireless service has won praise for clarity since it began operating a two years ago. Nevertheless, it will be a long time before Kenyan consumers gain full confidence in Telkom Kenya.

The biggest weakness for Telkom is its tendency to launch an excellent service, only to let growing demand overwhelm service delivery. There are many examples from the past where a good and affordable product from Telkom was reduced to tatters due to neglect.

Instafon, electronic phone cards, Telecare Centres and public telephone booths are services that have withered over the years. Indeed, Telkom’s announcement yesterday coincided with the uprooting of telephone booths from Nairobi streets. Clearly, Telkom has given up on keeping the booths in working order.

Telkom’s ISP service is notorious for constant disruptions. Many cybercafés are sticking with Telkom mostly because it’s cheaper than other ISPs. As for Telkom Wireless, its internet service has stopped working.

Telkom Kenya is banking on cellular technology to help it curb cases of vandalism that cost the company up to Sh450 million in losses each year. Telkom wants to transform its analogue system into first-world technology that is also cheaper to maintain in the long run.

Kenya’s mobile market is the largest in East Africa and has experienced exponential growth in recent years with the number of mobile phone subscribers growing from 900,000 in June 2002 to 11.5 million in May 2008.

With mobile phone penetration in Kenya currently standing at only 34 per cent, there is potential for Telkom Kenya’s new product offering. Telkom is hoping to benefit from new users who were previously unsubscribed, dual network users and users switching from the already existing networks.

“We cannot cover the whole of Kenya in one day,” said Dominique Saint Jean, “we will start with the major towns especially Nairobi and Mombasa and spread to the rest of the country gradually.”

Perhaps, slow and well-managed expansion will help Telkom make a clean break from previous habits.

With additional reports from Mobile Africa

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