Opportunity turns nightmare
-AccessKenya’s troubles began when it issued a profit warning on December 15 last year that full-year profits would be 25 per cent lower compared to the previous year. This, coupled with governance issues, has been eroding investor confidence.
-Growing competition from nimble rivals has not given it breathing space. Mobile operators led by Safaricom and internet service providers like MTN Kenya and Kenya Data Networks have stepped up their game, causing a major shift in market shares.
This has seen the company turn to cost-cutting measures such as reducing borrowing expenses and renegotiatingbandwidth contracts with international cable owners.
Mr Jonathan Somen, the managing director, says some of the decisions made two years ago have come to haunt the company. “There is no secret about our profitability,” he says.
“We have learned a lot of important lessons. There were a lot of things we did that affected our business, but we have put measures in place to rectify the situation.”
One of them was investing heavily in infrastructure then the ground shifted suddenly as mobile phones entered the fray. Also, the acquisition of Openview Business Systems turned out to be disastrous, with the unit soon running into the red.
-What are your views and how can kenyan ISP providers improve and most important How can they avoid losses in the Kenyan Market?
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