Telkom Kenya, a France Telecom subsidiary, is looking to raise cash as it continues it restructuring plans that will see the elimination of more than 400 jobs. According to sources close to the company, it is putting up a number of assets for sale in the hope of increasing revenue reserves as competition in the telecom sector continues to grow in Kenya. The sources said the former state-owned telecom firm has cut its marketing and advertising spending by more than 400 million. When contacted, Telkom Kenya declined to comment on the developments. In recent months, Kenya's mobile phone market has seen a battle for the market and widespread price wars have reduced overall profit margins in a number of companies. The Communications Commission of Kenya introduced new, low mobile termination rates – from Sh4.42 to Sh2.21 – in August last year, which precipitated a price war that has seen retail prices slashed to unprecedented levels. It was initially sparked by Airtel Kenya that saw voice calls fall 50 percent to Sh3 per minute and users can now send short text messages at extremely low prices. “Clearly Airtel crushed the cumulative voice revenue curve. Minute consumption has not seen gains commensurate with tariff reductions,” said investment analyst Aly Khan Satchu, in comments published by allafrica.com. Telkom, he said, has been caught in the cross fire of the Airtel-Safaricom show down. “Telkom carried over a lot of fat with regard to the workforce.” BM
