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Kenya Telephone Firms Feel the Pinch

Date: 1/15/2008 1:26:06 AM

Three telecommunication operators lost a whooping Sh1 billion in postelection violence that hit various parts of the country.

The skirmishes affected performance in the telecommunication sector.

Mobile phone operators, Safaricom and Celtel Kenya, and fixed line operator Telkom Kenya, join a long list of companies that lost revenue.

The Government has since estimated that Sh60 billion was lost in production during the period.

Safaricoms Chief Executive Officer, Mr Michael Joseph, said the company suffered a Sh400 million loss in revenue, while Celtel puts their figure at Sh200 million, TelkomKenya estimates their losses at Sh220 million.

Most of the losses were due to distribution breakdown caused by the violence, the result of which was a shortage of airtime.

There was also destruction of base transmitter stations and logistical support to staff in the affected places.

Celtels Corporate and Regulatory Affairs Director, Ms Clare Ruto, said the skirmishes made it difficult for distributors and dealers to reach customers.

"The losses are in terms of revenue, burning of base transmitter stations, airlifting and sometime putting staff in hotels in the affected areas," she said.

Safaricom said they could not sell airtime because it did not have access to various areas due to insecurity.

"Christmas and New Years days are our highest traffic days in the year so we forecast to have a significant amount of airtime sold and used. This was, however, not to be," said Joseph.

He said they experienced an immediate drop on the day the violence broke out.

Safaricom resorted to distributing airtime in the affected areas via helicopter. It also evacuated stranded staff.

"These efforts were entirely meant to stabilise the country and get people communicating and reach for help. We, however, cannot quantify the cost implications of these," said Joseph.

The company, through its MPesa service, managed 15 per cent of its business a day because distributors had closed shop during the period.

"During Christmas and New Year we recorded good business due to the high traffic in communications. This was well until election results were announced," said Joseph.

Apart from lost opportunity, Telkom Kenya suffered vandalism by rioters.

"In terms of revenue, we lost Sh200 million. We also lost poles and cables amounting Sh20 million during the period," said Telkoms Chief Corporate Communications Officer, Mr Bernard Rubia.

However, the figure could be higher.

"We get to know the exact figures when we bill and audit at the end of the month," he said.

Rubia said that during the period, rioters plucked poles and used them to block roads and in the process damaged cables, cutting communication to various areas.

"Our engineers are on the different sites undertaking the necessary repairs. In areas in which we have not been able to restore our services due to infrastructure customers can use our Telkom Wireless service which is up and running," said Rubia.

UUNET Kenya Managing Director, Mr Geoffrey Shimanyula, said the company had difficulties accessing certain parts of the country for regular system maintenance and repair.

"Failure to make repairs in the course of delivering telecommunication services signals a possible paralysis it could be impossible to run ATMs and airline booking systems," he said.

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