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

[Andrea Bohnstedt]

Aki, those are different things:

What is Access going to do? No idea. Ask them. Not my point.

I didn't say the article was negative or unimportant. I just disagreed with
your 'the customer has spoken' conclusion, as that wasn't the logical
conclusion from the article. A 30% drop in profits is not necessarily the
result of customers leaving in great numbers because they are dissatisfied.

According to the data cited in the article, it is partly the consequence of
significant infrastructure investments, and POSSIBLY a decline in corporate
customers. That is not clear. Maybe you could fish out the Access Kenya
statement and check whether they just had a slowdown in the growth rate of
corporate clients, or whether that number, or the turnover in that segment
fell?

Yes, competition is a good thing, I agree with you on that.


On 23 March 2010 10:53, aki <aki275 at googlemail.com> wrote:

> 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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-- 
Andrea Bohnstedt
Publisher
+254 720 960 322
www.ratio-magazine.com
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