In two recent but unrelated developments, Kenya’s telco industry has a potential opportunity to change its trajectory: the launch of the Nairobi Securities Exchange Marketplace and the announcement of the full acquisition of Telkom Kenya by the government.
These two significant developments could set in motion activities that will revitalise the industry for the benefit of consumers. For starters, Telkom Kenya could be listed and ordinary wananchi offered a chance to affordably own a morsel of it, as envisioned by proponents of the NSE Marketplace.
In the process, the telco will be able to raise the much-needed capital locally to invest in expanding and densifying its infrastructure across the country, financing its operations, and presenting a formidable, alternative telco and an attractive and comprehensive mobile money service to Kenyans.
In this move, the government could hit more than one impactful economic objective. The outcome would be an empowered and investment-conscious population, owning a stake in a company that is of strategic national importance. With financing unlocked from local sources, the quality of service would be enhanced to cater to the new shareholders and the economy.
Over the years, the telco industry has suffered from uneven competition that has benefited the dominant player, to the disadvantage of the smaller players. Efforts to correct this situation have been slow without delivering much result. This has left the smaller players unattractive to investment, constraining their operations and limiting choices for Kenyans besides leaving them predisposed to the dangers of dominance.
Such a move makes huge socioeconomic sense. With the internet regarded as a basic human need in today’s world and the many use cases arising from mobile money, it is critical that the telco industry on which these services run, is facilitated to thrive.
What better way to do this than by encouraging a competitive landscape that delivers benefits to Kenyans? Imagine how this will benefit the economy and particularly the so-called ‘hustlers’ at the bottom of the pyramid, who this administration has declared intent to empower.
Fortunately, circumstances have conspired to deliver favourable conditions to actualise this scenario. The onus is now on the government to seize this window of opportunity and urgently take measures that will deliver Telkom Kenya as the first of at least six state-owned entities to the bourse, as promised by the President when he rang the bell recently.
Listing it would set in motion a virtuous cycle that will benefit the industry, the economy and, most importantly, households across the country. This listing may also help re-attract foreign investment back to the industry.
Unfortunately, recent conversations around the industry have dwelled more on the history and less on how to move it forward for the benefit of the economy. While there is value in glancing at the rear-view mirror to learn from the past, we cannot entirely focus there if we are to move forward and make the most of the future.
This is the era of the micro-economy and an opportunity has arisen from unlikely, but potentially impactful quarters. Let us not miss this window of opportunity to breathe fresh air into the country’s telco industry.
Commentator on the ICT industry
