[AfrICANN-discuss] Kenya: EASSy Should Rethink Entry Strategy

Mamadou LO alfamamadou at hotmail.com
Fri Jul 30 17:56:40 SAST 2010

Kenya: EASSy Should Rethink Entry Strategy
Harry Hare
29 July 2010

Alcatel Lucent, one of the two large undersea fibre optic construction companies, handed over the East African Submarine System (EASSy) to its shareholders last week.

This is nine years after the mooting of the idea of the cable by telecom operators in the region, which was later to be dogged by ownership and operational problems causing major delays in its operationalisation.

As a matter of fact, EASSy was meant to be the first cable on the east coast of Africa, but SEACOM and later TEAMS took advantage of the disagreements in the consortium and rolled out faster.

Meaning both cable systems got to the market earlier and therefore managed to sell their capacity ahead of EASSy, which had a first movers advantage.

With the first mover's advantage gone, and entering the market a late third, EASSy has a herculean task in selling its capacity especially in Kenya.

They have to come out aggressively and provide a very attractive value proposition to its customers.

The consortium is made up of 21 telecom operators and including Telkom Kenya who are the anchors in Kenya.

Operational functions

The West Indian Ocean Cable Company (WIOCC) is a special purpose vehicle, which was created by the shareholders to manage its administrative and operational functions.

But the handing over ceremony last week got me thinking.

EASSy's principle partner in Kenya is Telkom Kenya.

This means Telkom is meant to sell some of the 30gbps EASSy capacity to its clients.

But Telkom is also a major investor in TEAMS, which competition to EASSy.

So, when do they sell stop selling TEAMS to sell EASSy?

The Telkom through their strategic investor, France Telecom are undersea in the trenches making their way to Mombasa with their very own cable - Lion.

Meaning, by the end of the year, Telkom will be managing or selling three undersea cables.

I ask again, when do they stop selling which cable and start selling the other?

Mickael Ghossein, Telkom Kenya's CEO said the cable would see an increase in speed and reliability and would be beneficial to its consumers who would see a remarkable improvement in quality.

So he is touting reliability and increase speed as the value proposition to his customers.

But what value will WIOCC and the other EASSy stakeholders have in having Telkom anchor operator for their cable?

I have a hunch that Telkom's role in the consortium and especially its market entry strategy with the EASSy capacity could become another problem for EASSy.

Telkom has divided loyalty, unfortunately split three times between three cables.

This means they will not focus on making EASSy a success, they will focus on serving their clients and making their bottom line look good.

Whether they use EASSy capacity or any other cable to do this, is neither here nor there. And you cannot blame them for this, they are in business.

The consortium still have options and it would be wise to explore all the possibilities that would off load the business development function of the cables capacity from Telkom who this writer, from experience with their other services, feels are already overwhelmed.

Hare is a Director at African eDevelopment Resource Centre, a training and consulting firm based in Nairobi. Follow him on Twitter @hareharry



Source : Business Daily
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