In that case God have mercy on them. Its a serious problem through out the industry,at Wananchi Richard Bell had to resign from East Africa Capital partners to go back and run WOL because they were loosing their USD 170 million investment.Now they have received another 5 billion investment hope they dont run into same problems.
Essar (Yu),Orange and even Airtel are yet to register tangible ROI.I once attended a Telemanagement Forum seminar in Nice and in one of the discussions high operating cost and Business Inflexibility are the number one enemies of telcos.As a result many of telcos are far from lean.Most telcos in Kenya are characterised by
a) Silo based organizations where sales,service operations,network planning,core network operations,access network operations and filed installations work independently with poor process integration.
b) High Man-power cost-because of a lack of automated process flow through.(Wananchi with like 5 offices in Nairobi)
c) Poor time-to-Revenue-because of rigid and inflexible business process.(e.g KDN slow on FTTx,Zuku roll out to other parts of Nairobi)
d) Weak Customer Service-because of poorly integrated systems with inaccurate data.(Just go through all the complaints in this list about service and I rest my case)
e) Slow or Declining Growth- because -Because systems and processes cant scale.(Apart from Queen Bee who else is making profit?)
f) Slow New Service introduction-because of high risks and costs to make changes.(Can Access change from wireless to GPON? )
g) Poor economies of Scale - because of using hundreds of suppliers.( Queen bee and Airtel I know are now dealing with Huawei which is good but quality is in doubt).
h) Obsession of owning infrastructure leading to high CAPEX and slow ROI- Everyone wants to roll out something,fibre,wireless,3g,masts,base stations....why cant they share and battle it out on service.At least Queen Bee and Orange have started albeit late.
I can give practical simple solutions for these problems but I will be accused of demeaning the profession by giving free service.On Fri, Jun 17, 2011 at 3:57 PM, David Kiania | Asentric Consulting Ltd <kianiadee@gmail.com> wrote:
MacD,
As much as I believe in you, I hope you don't take up such an assignment. Both companies have been in existence for several years and both face very different challenges. AK needs to defend it's marketshare in both home and corporate. Home, eeeh having wireless compete with GPON (FTTX) and 3G, I can't see how you can turn around that business.
Corporate, queen bee has existing relationships and solid processes for installation and customer support. It's unlikely that they can churn customers.
KDN, sijui niseme nini, Customer Service, Quality of Service have always been issues that they have not hacked several years later on. I worked there and a number of people in this list and they attest the same. FTTx rollout has taken longer than expected and they are loosing ground. Queen bee is moving into FTTx as well as another company which will remain un-named and this will be on open access model.
If you decide to go for it Good luck. The numbers will judge you.
My two thoughts
Kiania DOn Fri, Jun 17, 2011 at 2:58 PM, Joseph McDonald <mcdonaldoj@gmail.com> wrote:
Am sure AK and KDN are in a tricky situation due to the losses,but am sure they can turn it around.
In the short run (30-90 days) these companies can have 30% reduction of cost, Increase of revenue and customer satisfaction by doing Process Innovation.
Many companies try to gain competitive advantage through structure, size and even their product portfolios—but frequently create complexity that customers are unwilling to pay for.You see structure and even products can be copied,its only when structure,size and products are mixed with good process only then can a company get sustainable competitive advantage.
The process innovation will actually involve linking process to customer value and profitability.
Telecommunication service is something all of us are familiar with, most of us use, and many of us rely on as an integral part of our daily lives.
With a product (Internet) that has such broad appeal, it would seem logical that telecommunication providers would act aggressively to establish a compelling offering,one that differentiates itself from the rest of the market place.
Nothing could be further from the truth.
Because we know that process innovation is the primary driver behind competitive differentiation it would logically follow that the customer-facing processes of these businesses would undergo intense scrutiny in the effort to evolve their competitive differentiation. In Kenya, the established telecommunication service providers have instead opted to focus on gizmos, glitz and combative marketing campaigns that set unrealistic customer expectations that are impossible for the business to actually deliver on.
In fact, the industry carries such an excessive overhead (inefficient processes) with a glaring track record of horrible customer service and satisfaction that the only way they have found to make minimal profit margins is by grace of the almighty or forcing customers to buy service contracts.
Without these service contracts, the Causes of Work and process Points of Failure leech away any hope of profit for these companies.
The way forward is to have an outside-in approach and identify the moments of truths (interaction with the customer).
I know it sounds generic and academic but it has been done before notably by Jan Carlzon when he transformed SAS from USD 17 million loss to a USD 54 million profit in 1 year,using the same methodology.
I would be willing to assist any of these companies with my expertise in this area.
On Fri, Jun 17, 2011 at 2:41 PM, David Kiania | Asentric Consulting Ltd <kianiadee@gmail.com> wrote:
I don't think MTN can hack this market it's way too competitive for them and the margins are far from ideal. Last but not least their country of origin ...eeeh ya!
AK had been approached buy Mweb for acquisition before AFSAT , initial discussions completed and final numbers arrived at. But the Founders exaggerated their cash ambition and they were left high and dry. Currently they are worth a fraction of what was on offer at the time.
Kiania DOn Fri, Jun 17, 2011 at 2:34 PM, Joram Mwinamo <joram.mwinamo@gmail.com> wrote:
Do i See MTN bidding to buy Essar, then AK?Sent from my Voice Recognition Watch©On Fri, Jun 17, 2011 at 2:07 PM, [ Brainiac ] <arebacollins@gmail.com> wrote:
call it doomsday prophesy but i am predicting.Queen Bee is gonna swallow them all.....--On Fri, Jun 17, 2011 at 2:00 PM, David Kiania | Asentric Consulting Ltd <kianiadee@gmail.com> wrote:
Two major Internet players to hit the headlines on the today with
quasi adverse mentions. In todays Business Daily KDN has been hit by
mass exodus of talent and will be replaced by mainly South Africans
(yes South Africans) http://bit.ly/mPpT8D and Access Kenya is merging
it's businesses and the underlying numbers look scarcely.
http://bit.ly/irHphP
AK lost an amazing KES. 134m in FOREX loses ONLY and also saw their
revenues decreased by KES. 300m from 2billion to 1.7billion ouch. In
the intervening year AK has not made notable investment in
infrastructure or marketing so the revenue is bound to decline even
further. I also think the Safaricom assault on their corporate
business and Airtel heading that way ... shareholders have a right to
be very concerned.
Only time will tell how these companies would do but even with
impending changes at KDN would we prefer a better managed company by
foreigners or we really don't care? As far as AK is concerned ...
My thoughts
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