<div>Mike and Kenyans</div>
<div> </div>
<div>Thanks for the contribution. I request you to log online on <a href="http://www.petitionspot.com/signature/TELKOMKENYA">http://www.petitionspot.com/signature/TELKOMKENYA</a></div>
<div> </div>
<div>Robert<br><br> </div>
<div><span class="gmail_quote">On 7/11/07, <b class="gmail_sendername">Mike Theuri</b> <<a href="mailto:mike.theuri@gmail.com">mike.theuri@gmail.com</a>> wrote:</span>
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<p>
<div>This article appeared in 2005, but it becomes very relevant when it appears that there is a sudden and </div>
<div>urgent rush to quietly privatize TKL by selling it to foreigners, while "restructuring and preparing" TKL for</div>
<div>that process at taxpayers expense, a tax burden that future generations of Kenyans will still be paying </div>
<div>with nothing to show for. The problems that TKL has are self created, they can be fixed and TKL should</div>
<div>not be sold at such a throw away price that is hardly sufficient to cover the debt that has been and which </div>
<div>additionally is likely to be transferred to the taxpayer. For those reading it is now 4 years to date since</div>
<div>the secret dossiers mentioned in the article were written and no prosecution or conviction has taken </div>
<div>place:</div>
<div>
<p><a onclick="return top.js.OpenExtLink(window,event,this)" href="http://www.eastandard.net/archives/sunday/hm_news/news.php?articleid=14743" target="_blank">http://www.eastandard.net/archives/sunday/hm_news/news.php?articleid=14743
</a></p>
<p>Self-inflicted woes </p>
<p><br>Telkom's growth is stifled by fraudsters colluding with staff as competition <br>bites, writes Gordon Opiyo. </p>
<p>Top officials of Telkom Kenya are involved in fleecing the cash-strapped company <br>of billions of shillings, according to independent investigations by the <br>Communications Commission of Kenya.</p>
<p>According to confidential reports prepared by the regulator, Telkom Kenya failed <br>to take advantage of the five-year local and international fixed line calls <br>monopoly due to collusion between the employees and an international syndicate
<br>of phone companies.</p>
<p>In the estimation of then Transport and Communications minister John Michuki, <br>Telkom had lost over Sh120 billion in the previous seven years due to these <br>leakages.</p>
<p>Yet the minister failed to stop the syndicates, and appeared to have acquiesced <br>to them or become hostage. The company now has to grapple with tough competition <br>after the end of the exclusivity status in June, last year, with about 10,000
<br>employees set to lose their jobs through an impending retrenchment exercise. <br>While Telkom Managing Director John Waweru says the company has nothing to hide <br>and is willing to co-operate with any investigators, indications are that there
<br>are still too many untouchables fleecing the parastatal.</p>
<p>Information and Communications Permanent Secretary, Mr James Rege, plays the <br>same refrain: "We have an open-door policy and will ensure that any official <br>found to be involved in any improper deal takes responsibility for his or her
<br>action."</p>
<p>Yet both officials have before them detailed reports of how the company lost the <br>opportunity to take full control of the local and international calls market, <br>despite having the advantage of being a monopoly. The decline was rapid, with
<br>countrywide subscriptions to Telkom Kenya's switchboard falling by 14.7 per cent <br>to 280,000 lines in June 2004 from 328,358 the year before. And whereas <br>international calls used to generate 80 per cent of the total revenue a decade
<br>ago, the figure has dropped to about 30 per cent.</p>
<p>Investigation</p>
<p>After the raid on Data Global Limited Justice and Constitutional Affairs <br>minister Kiraitu Murungi ordered the CCK to investigate the magnitude of the <br>fraud and how it was perpetrated. The Kenya Anti-Corruption Commission also
<br>requested a similar brief.</p>
<p>According to the reports, Telkom Kenya's revenue declined because of fraudsters <br>adopting new technologies for transmitting international calls, and its failure <br>to change fast enough.</p>
<p>Fraudsters, with the help of Telkom Kenya employees, managed to get into the <br>lucrative international call market by offering cheaper calls. Among the methods <br>identified by the regulator's investigators were Voice Over Internet Protocol
<br>and the Very Small Aperture Terminal (VSAT). These technologies make it possible <br>to make calls at a fraction of the cost of the traditional methods that Telkom <br>Kenya used.</p>
<p>Apart from the technology, Telkom entered into suspicious contracts with three <br>companies – CDR, N-Tel and Zantel – which, according to the CCK, have the <br>equipment to compress call traffic so that a small transmission capacity can
<br>handle more telephone lines than a normal Telkom system. The companies entered <br>into agreements with the parastatal to terminate international calls from other <br>countries at a much lower cost — obviously to the detriment of Telkom.
</p>
<p>For instance, a call that comes to the Telkom network from abroad is terminated <br>at $0.2 per minute, but those that come through the other companies are <br>terminated at $0.06 cents per minute. Worse for Telkom when the calls come to
<br>mobile phones because it loses Sh14.50 per minute. "Going by the statistics of <br>the previous financial year (2002), where Telkom Kenya terminated over 17 <br>million international call minutes, this amounts to a loss of over Sh178
<br>million," says the CCK report to the Kenya Anti Corruption Authority.</p>
<p>The CCK questions the manner in which Telkom awarded the contracts to the three <br>companies, contravening three conditions laid down in its licence – condition 18 <br>on fair trading, condition 25 of informing the regulator of joint ventures and
<br>condition 26 that gave it exclusivity in the provision of international calls.</p>
<p>In other words, Telkom gave up its exclusive rights to operate international <br>calls to the three companies through the backdoor. Although the regulator says <br>that they have not been able to get the real owners of the companies,
<br>investigations by The Sunday Standard have established that the firms were all <br>owned by influential members of the previous administration and a former <br>director of Telkom.</p>
<p><font color="#ff0000">What is interesting is that although the file on the fraud investigation in <br>Telkom has been open at the Kenya Anti Corruption Authority since 2003, no <br>action has been taken to stop the illegal operations. Instead, most of the
<br>officers investigating the have either been transferred or recalled to the <br>Criminal Investigation Department.</font></p>
<p>In December, last year, Dr John Mutonyi, assistant director in charge of <br>investigations told The Sunday Standard that that his men were still <br>investigating the matter. However, when contacted for the past two weeks, Dr
<br>Mutonyi failed to respond to our calls.</p>
<p>The CCK report to Kiraitu says: "The kind of defense Telkom Kenya is giving to <br>agreements, which are one of the biggest contributors towards the decline in its <br>international revenue shows that individuals from Telkom Kenya are gaining from
<br>it."</p>
<p>In an earlier interview with The Sunday Standard, Waweru had said that the <br>contracts were signed before his management came into office and that the new <br>team was reviewing them. </p>
<p>The investigations also revealed that billions of shillings were lost through <br>illegal satellite dish operators who, according to the briefs, were supported by <br>Telkom Kenya staff to get telephone lines fixed to the local exchanges.
</p>
<p><font color="#ff0000">"We suggest that an independent investigator be sought to address the problem of <br>decline in Telkom Kenya's revenue including the illegal international traffic <br>termination by Data Global at Lonrho House. Telkom Kenya cannot investigate
<br>itself on this matter because they appear to be abetting culprits," concludes <br>the report.</font> </p>
<p><font color="#ff0000">However, two years after the secret dossiers were written, no major change <br>action has been seen.</font> </p>
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