The story can be found in today's Daily Nation. What caught my eye however is the fact that 'as Telkom has continued to make huge losses......France Telkom have been squeezing interest payments and other fees from the Kenyan Subsidiary that could easily rival profits made by some of the biggest banks in Kenya'

Not really surprising because this is the same thing that happens every time foreigners invest into quasi government bodies - they ensure that they earn their dividends in form of huge management fees irrespective of how the entity is performing. Remember Pan Paper Mills?

It seems what Safaricom accomplished in Kenya is not 'as easy as pie'.

And Michael Joseph learnt it the hard way if I recall correctly. In freezing Hungary, he was working for the 3rd mobile teleco and he had painful memories. Whatever they did, they could not unseat the dominant rival and their business plain struggled. He sure as hell, did not repeat that mistake in Kenya.


Now Telkom Kenya story was shocking to read. I think the answer lies with approaching business as Apple did with Microsoft. Apple by the way was so beaten down in 1999 that they took a loan from their arch enemy and swore never to compete with Microsoft directly again in their dominant PC segment. For their reinaissance, they chose to compete with SONY in personal devices instead.

So Telkom Kenya is the king of data. Why bother with all these Fixed line/voice/SMS/VAS segments? I say they should use them as loss leaders but just make sure any one in Kenya (individual, SME, Corporate, MNO) who needs data personal modem, wireless, leased line, backhaul network uses Orange Telkom.

After retrenching 16,100 kenyans they want the same to bail them out? And also the issue of ownership. Apparently some big people own 10.7% of the company. Who are these? France Telecom discloses that it owns only 40.3 per cent of Telkom Kenya.