[kictanet] When the Internet consumer market bites back...

[aki]

Hi Andrea, I put forward this question.How excatly is AK going to tap into
the SOHO market? It cannot do so with a bandwidth price tag of
double-bandwidth/same price scheme and it is eyeing a sector that many have
already targetted long before the arrival of undersea cables. Most buildings
for example in Nairobi are on national fiber, KDN fiber, JTL Fiber, Telkom
Fiber as there. All these players have Internet terminations, switches and
bandwidth allocations to tenants within those buildings. What excatly is AK
going to offer better than these players? = cheaper bandwidth as a start. Do
also consider that by towards the end of this year, most annual contracts
that Corporate clients have with ISPs will need to be renewed and am sure
that many are not happy being bogged down to the double-bandwidth/same
price scheme whereas they can buy the same bandwidth at half or quarter
of the price.  If AK profits dropped by 30% and it learnt something
important from the market, then we have a bonus as end users. I dont think
the Business Daily article is negative at all, infact it is an important
piece of information. Lets see how things turn out towards the final quarter
of this year. I'm sure we will re-visit some of the points listed here.

Rgds.



On Tue, Mar 23, 2010 at 10:18 AM, Andrea Bohnstedt <
andrea.bohnstedt at ratio-magazine.com> wrote:

> I'm with Tim on this. I haven't looked at the overall data yet, but
> according to the BD articles and assuming they cite this correctly, some, by
> no means all, customers may have spoken:
> 'While AccessKenya’s revenue was up 32 per cent from Sh1.5 billion to Sh2
> billion last year, a slowdown in profit as a result of lower corporate IT
> sales, last year, proved to be a major stumbling block for the firm.'
>
> This doesn't actually say whether the growth in corporate IT sales has
> slowed down, or the company's number of corporate clients has declined.
>
> In addition, corporate ITdoesn't appear to have been a focus:
> 'AccessKenya is eyeing the opportunity to tap the increasing appetite for
> Internet connectivity in the high-end residential and SOHO (Small offices
> and home offices) segment.'
>
> And the company doubled its investments in infrastructure:
> 'Last year, AccessKenya spent Sh1 billion in investing activities compared
> to Sh511 million in 2008.'
>
>
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