How do you manage a company hit by a crisis?

I have been working in a company that is truly in trouble and if nothing is done soon the stress levels caused by uncertainty might be catastrophic.But as I sit on my desk I always wonder what  I would have done differently if I was the MD or a decision maker in this company.Priscilla Nelson and Ed Cohen article saving a crisis ridden company   in  http://www.strategy-business.com on how Satyam Computer Services survived a massive fraud scandal summaries some of the things I wish the management would do.

Access Kenya Group needs some fresh blood.

The performance of access Kenya group, over the years, has come under sharp focus and criticism for the lucid way the management is carrying its business. The declining revenues and profits and lately turnover has greatly affected its share price in the NSE and considerably reduced its market capitalization, indeed it is the worst performing stock in the NSE.

This poor performance need to be tackled by taking drastic measures on the company’s management, someone need to take responsibility for these losses. The board room squabbles that have been witnessed in the past just show how the management of this company lacks direction and strategic planning to turn around the fortune of this company.

from www.mystock.co.ke

Lame excuses should not be tolerated anymore, it is time to make that difficult decision of sacking the MD and recruit a new and fresh CEO to salvage and grow this dying company.The latest assertion by the current MD to the effect that they are doing well in all sectors and there is no need to change strategy or product range shows how myopic and unrealistic he is  given that in their latest financial report price war and competition from telecommunication companies were quoted as being  partly to blame for the reduced earnings.

The Latest information from the Communications Commission of Kenya (CCK)indicate that mobile service providers have 98 per cent of all internet service subscription numbers as at January 2011, with the rest being shared out between 10 stand-alone ISPs. Safaricom the countries largest telecommunication company controls 92% of that market. But in terms of revenue share Access Kenya still remains top with an estimate 40% of the corporate clients. Using this statistics coupled with recent revelations of principal shareholders  exiting the business through offloading of their shares through the NSE, It’s imperative that a new person is recruited to safeguard the interest of other shareholders.

The Butali sugar Fiasco

The legal debacle facing this company is far from over following the latest court injunction halting its operations weeks after it was opened by the prime minister .



The legal tussle pits Butali Sugar Company against West Kenya Sugar Company.The bone of contention is , Butali sugar company breached the sugar act by constructing the company without following guidelines on catchment area limits .West Kenya Sugar Factory, owned by the Rai family, is only 16 kilometres from Butali but according to the Sugar Act, factories should be no closer than 24 kilometres to ensure they get enough cane.

The West Kenya factory was originally owned by the Patel family but in 2004 Jayanti Patel left the business after his nephew Sunil became the chief executive. He then applied for a licence to establish a sugar company in Kakamega. West Kenya objected but eventually the licence was issued and it became Butali.


For the past seven years, there has been a constant tug of war as government repeatedly rescinded and reinstated the Butali licence.

In October the High Court issued an injunction blocking the Kenya Sugar Board (KSB) from issuing an operating licence to Butali. The order was to be in force until February 14 when the matter was to be heard inter-partes.

West Kenya Sugar Company filed an urgent application on February 12 in arguing that the Attorney General and the Kenya Sugar Board disregarded the court order and issued Butali with a licence to operate.The court therefore , reinstated the order issued in October last year until the petition by West Kenya Sugar Company is heard and determined.

The deputy prime minister,Hon.Musalia Mudavadi, hinted at behind the scenes negotiations to see a way in helping Butali commence operations soonest possible.

Safaricom-Alepo partnership to grow 4G network.

Safaricom has partnered with Alepo, a leading provider of control plane & business management solutions for next generation services, to support its growing WiMAX network with enhanced policy control, QoS granularity, and IP address management. 

Safaricom has selected Alepo to implement its award-winning 16e AAA server and DHCP server as part of its nationwide WiMAX network.For advanced IP address management, including support for IPv4 and IPv6, Safaricom will deploy Alepo's DHCP Server. The server automatically provisions IP addresses to CPEs, either dynamically or statically for services requiring static IPs. The ability to segment and allocate IP addresses via IP pools prompts greater resource optimization.

Bob Collymore, Safaricom CEO, said the implementation of Alepo's core network elements will afford Safaricom greater control over network policy, security and resource allocation, while achieving more flexibility in designing WiMAX and Wi-Fi service offerings for their customers, residential and commercial.

 Alepo will also,  provide integration with Safaricom's existing CRM system, allowing the incumbent mobile operator to provision and manage both WiMAX and GSM subscriber accounts from one centralized and familiar CRM interface, thus reducing operational and training expenses.

Alepo's AAA server and DHCP server are fundamental components of Alepo's comprehensive suite of 4G products and solutions, and Safaricom will be able to use them to remain competitive in the market.

Mpesa to enjoy the Monopoly for Now - CBK Governor.

The Kenya's central bank governor,Prof. Njuguna Ndung'u, is against Airtel's latest proposal that aims to harmonise money transfer systems currently offered by mobile phone operators.He argues that this proposal would kill an innovation that has helped majority of Kenyans come into the formal economy.


Prof.Ndung'u believes that even though the Interoperability proposal will bring the cost down,it will greatly affect companies which have proprietary rights to the innovation,affecting growth and competitiveness in the sector.He advised the companies who are lobbying for the building of  a seamless money transfer platform ,that would allow telecoms to merge their functions with M-Pesa, to first build their Customer base before debating how interoperability will reduce costs, until then,he said, proprietary right will be respected.


Airtels proposal which was submitted to the PMs office for consideration  aimed at building a seamless money transfer platform that would allow telecom companies offering money transfer service  merge their functions.It would mean that cash transfers could be sent between networks, as well as allow new telecom companies use agency network of established telecom companies like safaricom to extend their reach, a move aimed at diluting the market leader’s dominance.

Safaricom’s rivals argued that  establishing  a central clearing house would offer them headroom to significantly cut costs  and that such a platform would remove the high cost that is preventing consumers from moving money across networks, but Safaricom argued that the move would infringe on its proprietary rights.

Currently it is possible to send money across networks, the transfer process  costs 10 times more than the price of sending money within a network, making safaricom enjoy a monopoly because of the club effect,Safaricom has 13.5 million subscribers on the service with over 22,000 M-Pesa agents while Airtel, its main rival which operates a mobile money network dubbed Zap has about four million subscribers.Orange, which runs a mobile money network dubbed Orange Money, has about 100,000 users and 1,500 agents, while Yu runs a mobile money network dubbed Yu Cash.

Airtels proposals although Noble, was seen by many as a well thought out scheme to utilise safaricoms billions of  shilling  worth of infrastructure for free.

Airtel finally launches 3G unlimited @ ksh 2,600PM in Delhi.

Telecom major Bharti airtel today launched third generation (3G) services that offer LIVE and on-demand TV channels, video calling and high-speed internet access, in Delhi. 

Customers can choose from Airtel's 3G tariff plans, which have been crafted to prevent 'bill shock' and help customers monitor their consumption of data with personalised data usage limits and alerts. 

The price of Airtel 3G Mobile TV will be about Ksh.50 for 20 minutes per week. The company is offering video call rates at 6cents per second. 

The company has offered different plans like pay as you go offers for all the existing Airtel customers who want to experience the 3G internet, this plan will be there where they have to pay the prevailing rates as on 2G services. 

Flexishield plan has a combination of free data usage and low inbuilt volume based charging rate with a bill cap of Ksh.2,600. 

To download 2GB data prepaid and postpaid customers have to pay ksh. 975. Under the Flexishield plan the customer has to pay Ksh.880 for 1.25 GB free data download with 3G speed till total data bill reaches Ksh. 2,600, after that no charges on data access with speed of 20kbps. 

Airtel Live , which is India’s largest WAP Portal with more than 1 million visitors and 10 million daily page views – has been revamped with a richer look for airtel 3G customers. In this separate all-new experience for 3G customers, customers can create a personal portal containing their favorite RSS feeds, News categories, and email inboxes with live updates from their Flickr, Twitter, Facebook and other social network accounts. Navigation has been made more intuitive, moving away from a single Landing Page access to a Tab-based approach now. The revamped look is in-sync with the new airtel brand identity – giving it a more vibrant and trendy look with higher resolution graphics adding a richer and clearer feel. 

Airtel has also introduced a first of its kind internet usage calculator that will help customers monitor and analyse their current internet data usage and choose an airtel 3G plan accordingly.

Bharti Airtel Ltd, expects 3G services to help improve its average revenue per user--a key gauge of profitability for mobile phone operators.It currently offers 3G services in seven cities and plans to extend the service in all the 13 telecom areas where it has bandwidth by the end of this month.since December 2010 Airtel has garnered about 500,000 users on its 3G network, it is currently the largest wireless operator in India controlling 20.7% share of the subscriber market. 

Airtel business model is the way to go.

The low cost, innovative model championed by Airtel might be what Kenya needs to take the telecommunication industry to the next level.

The cost of establishing and maintaining a telecommunication company in Kenya is quite high due to lack of adequate infrastructure. Outsourcing, therefore, offers companies’ avenues through which they can concentrate on their core business and leave the rest of their peripheral services to experts who can cost effectively exploit them to create a symbiotic relationship with the operators.

When we look at Airtel, outsourcing is at the heart of its business model. All of its information-technology (IT) operations are outsourced to IBM, the running of its mobile network is handled by Ericssons and Nokia siemens Networks (NSN), customer care is outsourced to Spanco and other local BPO operators. This leaves Airtel to concentrate on strategy and marketing.

It is not airtel networks operations that’s only outsourced, but the constructions as well, According to the Economist, when Airtel moves to a new area ,under a scheme known as ‘managed capacity’, it requests from vendors a certain amount of calling capacity and pays for it three months later at an agreed price per unit of capacity, that leaves it up to the vendor to handle the business of designing networks, putting up base stations and so on, giving it an incentive to build the network as frugally as possible. This cut costs by ensuring that operators do not pay for more capacity than they really need. The vendors, for their part, gain economies of scale because they build, run and support networks for other operators. Ericsson’s Mr.Svanberg says his firm can run a network with 25% fewer staff than an operator would need. Airtels operating expenses are around 15% lower than they would be if it were to build and run its network itself, and its IT costs are around 30% lower.

This model does not go without its own challenges; given that Equipment vendors make most of their profits when capacity is increased, rural areas tend to be affected due to its low capacity uptake raising the need to search for the right balance of cost- and risk-sharing.These challeges has forced major operators in India to review their investment plans into the rural areas some have already submitted to the government their requests to move out of those areas. The government had invited bids in 2007 to create telecom infrastructure and provide services in villages, offering subsidy. 

However, telcos opted to go there without taking subsidy, and even offered negative subsidy (instead they offered to pay to the government), either to block other service providers or because they over-estimated the potential in rural villages.

But all in all our telecoms giants should follow suit, having a  low-cost model could give them a clear competitive advantage—and help increase mobile penetration rate ,making Kenya truly the silicon valley Of mobile telecommunication.