Orange to drive France Telecom into EA markets

Saturday September 20 2008

Vice President Kalonzo Musyoka, Information

Vice President Kalonzo Musyoka, Information Minister Samuel Poghisio and Orange Telkom Africa president Marc Rennard at the launch of Orange brand. Photo/ANTHONY KAMAU 

By MARK KAPCHANGA

France Telecom — one of the world’s leading telecommunications operator — will use Kenya as a focal point in its foray into the East African markets.

The company’s chief executive, Dominique Saint-Jean, told The EastAfrican that his company will use the strategic partnership it formed with Telkom Kenya in December last year “for our development in the region.”

In the partnership, France Telecom acquired a 51 per cent stake in Telkom Kenya enabling the latter to enter the mobile telephony market in addition to the fixed line operations it has been operating for decades now.

On Wednesday last week, Telkom Kenya in partnership with France Telecom launched a mobile telephony network under the Orange brand, making it the third mobile service provider in Kenya after Safaricom and Zain.

The entry of the Orange brand in Kenya, and their planned expansion to other markets in the region is expected to intensify competition in the provision of mobile telephony in Kenya at a time when Safaricom and Zain between them control the entire mobile telephony market.

A week ago, Safaricom and Zain were recognised by the Global Telecoms Business Awards in London. Zain was awarded for its innovation in regional roaming services while Vodafone — which owns part of Safaricom — won an award for its innovation in international mobile service through its roaming anti-fraud solution.

Currently, Safaricom controls more than 80 per cent of the Kenya market share.

Meanwhile, Econet Wireless Kenya is preparing for a test run later this month as it struggles to beat the November deadline to launch its services.

Currently, the company is finalising the setting up of its network, with the engineering work being carried out by Ericsson.

Touted as a mass market service provider, Econet is promising to break open the Safaricom M-Pesa system, which the latter has been using as a loyalty product to retainand acquiring new customers.

But the looming competition seems not to worry the France-based telecommunications company. The executive vice president of France Telecom Orange Group for Africa, Middle East and Asia, Marc Rennard, says, “The investment and innovation that France Telecom is bringing to Telkom Kenya will create a national operator that will supply the public and businesses with a broad range of world class services. Our investments in the ICT sector will take Kenya a step closer towards becoming the ICT hub of the region.”

The company plans to invest more than Ksh8 billion ($121 million) in infrastructure and raise its customer base to 1.5 million in its first year of operation.

Since the Communications Commission of Kenya (CCK) — the body tasked with licensing and regulation of telecommunications in the country — issued two mobile licences eight years ago, mobile telecommunication has continued to lead in the voice telephony market compared with the fixed network.

Statistics at the CCK show that mobile phone subscribers had hit 11,986,007 as at March this year, representing a 35.25 per cent penetration.

Under the newly found partnership, Orange will offer a flat rate tariff of Ksh7 ($0.11) per minute across their three platforms — Orange Mobile, Orange Fixed Plus and Telkom Fixed — while cross network charges will be Ksh14 ($0.21) a minute on a per second billing arrangement.

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