"Competition is healthy. If other people complain, they should know that Kenyans now have a choice," Telkom Kenya Chief Market Officer Bernard Rubia told Reuters in an interview. Rubia says it was "debatable" whether partnering with an outside investor was necessary for Telkom to turn a profit. Job cuts that will downsize Telkom to 4,000 employees from 18,000 by September are already realising savings of 250 million shillings ($3.7 million) a month against 1.2 billion in billings. "We should be given a five-year window to prove ourselves," he said, adding shares should be sold to the public in the meantime. ================ http://africa.reuters.com/wire/news/usnL19935122.html Kenya's state-owned telecoms operator goes mobile Thu 19 Jul 2007, 13:40 GMT By C. Bryson Hull NAIROBI, July 19 (Reuters) - State-owned Telkom Kenya is making an aggressive foray into the east African country's wireless mobile and data markets, aiming for rebirth as a sleek operator before privatisation due to start later this year. The loss-making state company, which has a monopoly on landlines, earlier this month rolled out the lowest mobile phone tariff in Kenya and stepped up advertising to bring in customers to its brand-new wireless network. That has sparked complaints from the other two mobile operators in Kenya, market leader Safaricom and Celtel Kenya, who say the state company has an unfair regulatory advantage. "Competition is healthy. If other people complain, they should know that Kenyans now have a choice," Telkom Kenya Chief Market Officer Bernard Rubia told Reuters in an interview. "And they will choose based on reliability, consistency and affordability." Telkom may seem an unlikely choice -- customers have long complained that inefficiency, corruption and monopoly control of landlines have kept Telkom's prices high and service poor, but it is now in the middle of a major restructuring. And Kenyans are quick to go for the best deal. It is not uncommon for someone to have multiple phone lines to take advantage of the cheapest rate or to avoid the steep expense of calling from one network to the other. On a trial run since September, the company's mobile subsidiary Telkom Wireless so far has 150,000 subscribers and is adding an average of 1,000 per day, Rubia said. "Our target is by the end of June next year we will have hit our 1 million mark," he said adding the average customers spends 800 Kenya shillings ($11.92) a month. That is dwarfed by the 6.8 million Safaricom has out of an estimated 8-9 million users in the nation of 36 million people. BANKING ON CDMA Telkom has rolled out a CDMA network to about 70 percent of the country to compete with Safaricom and Celtel, which operate a GSM network like most mobile companies in Africa. Rubia says the choice of CDMA was to lure Kenyan customers who get irritated by congestion on the GSM networks. "One of our towers is equivalent to four of theirs in terms of capacity," he said. A second benefit is to cash in on its data capabilities, which are faster than GSM. By September, Rubia says Telkom will offer EVDO, a mobile broadband data technology. But like other Internet data providers in Kenya, they will not be able to use the maximum capacity until the country gets a fibre optic connection to the Internet backbone. Currently it gets it via expensive satellite links that limit bandwidth and market growth. Rubia says he expects at least one of two projects to give Kenya a wired link to the outside world to be ready by "the back end of next year." Telkom Wireless customers will be able to access EVDO via mobile handsets and also wireless desktop phones. The latter often serve as Internet links in rural areas where there is little or no infrastructure -- and where mobile operators say there are still huge untapped profits in Africa. The government wants to sell a 51 percent stake in Telkom to a strategic partner, with an eye on an IPO that would eventually sell 30 percent to the public. Proposals are due to be opened by early November. Rubia says it was "debatable" whether partnering with an outside investor was necessary for Telkom to turn a profit. Job cuts that will downsize Telkom to 4,000 employees from 18,000 by September are already realising savings of 250 million shillings ($3.7 million) a month against 1.2 billion in billings. "We should be given a five-year window to prove ourselves," he said, adding shares should be sold to the public in the meantime.