Zain losing ground in Kenya
We have been following Kuwait-based Zain Telecom’s Africa unit right since it showed interest to when the deal was finally sealed, to when Bharti decided to pump in $308 million in the next 1 and a half years to reach the top spot in mobile services providers in Kenya. However things are not exactly going according to plan with Bharti Zain’s subscriber base falling by a little over 13% from over 42 million subscribers quoted during the acquisition to 36.36 million announced earlier in August.
Bharti Airtel spokesman dismissed the decline in subscribers by saying that the reporting in Kenya was different from that of India. According to Bharti, a user is not accounted for if he / she has not received a single call for a month. Bowever, analysts say that most telcos label a user inactive only if he / she has been inactive for anywhere between 3 to 6 months.
Bharti’s plans to become numero uno in Kenya seems to have taken a beating with reports suggesting that the customers who left Bharti Zain have decided to join MTN, the leading service proider in Africa. This does not look good for Bharti Airtel with a reported 32% decline in consolidated net profit. Though the acquisition of Zain may have been responsible for the decline in profits, if Bharti doesn’t ensure customer satisfaction in the African nation, revenues and profits will continue to slide.
Videocon may sell 26% of telecom arm
Videocon Industries has announced that it has started talks with foreign companies to sell 26% of its telecom arm Videocon Telecommunications that has 1.9 million subscribers and has a market share of 0.31%.
According to insiders, Videocon is struggling to keep up with the major players like Bharti Airtel, Reliance Communications, and Vodafone due to less offerings to the customer. By selling 26% of Videocon Telecom, the parent company plans to raise around INR 15,000 crores which will be utilized to improve services and expand operations to improve customer base.
The GSM service provider has services in various states including Kerala, Tamil Nadu, Punjab, and Haryana, amongst others. Videocon recently announced 1 paise/sec international calling to US and Canada. Such initiatives might get new customers on board, but the company will definitely need to improve service in order to stay in the race.
