Altech Group majority owned Kenya Data Network (KDN) top executives finally spoke about the problems bedeviling the regional data company. At a press briefing attended by KDN CEO Shahab Meshki and Altech Group Executive for Converged Services, the top executives responded to the issues affecting the company.
Altech Group owns over 60.8% of KDN.
First there has been rumours that the Altech Group is planning to exit the region. Tim Ellis was categorical that the group is not planning to exit the region but is looking for equity, technical or services partners. Tim revealed that the company is talking to around 20 companies as they search for partners. The pick will be revealed by December.
Tim also revealed that the company made a huge mistake in letting Safaricom go as a client. KDN differed with Safaricom when Safaricom wanted to buy “dark fibre” (just the capacity) while KDN insisted on selling to Safaricom managed services so that Safaricom can just be a reseller. Tim Ellis said that KDN feared that Safaricom might start competing with them and that “was the biggest business mistake KDN made.”
Regarding the much talked about retrenchment, Tim indicated that Altech Group is not planning to send more staff home. He said that “the company is now lean and mean.” KDN sent home around 51 staff members in a cost-cutting move.
With the retrenchment of locals and employment of expatriates very expensively, Altech has had problems convincing pundits that the group has its options right. The argument fronted that the expatriates deserve the pay and that they have the expertise does not wash because “expats” like Atul Chaturverdi has not been known to produce any meaningful result for the companies they have worked for previously.
So Tim Ellis said that Altech Group will not renew the contract of CEO Shahab Meshki, CMO Atul Chaturvedi, Chief Technical Officer Bob Laftie and Chief Operating Officer Raju Jandu because “the perception that the expatriates do not understand the local market will not end.” The contracts of the top executives mostly run for 2 years.
The top foreign executives were meant to turn the company around and “mentor” locals but this was not to be as the company has continued to go deep into business problems.
The company is also pursuing out of court settlement with some of the suppliers and clients who took it to court. Atul said that KDN has reached an amicable settlement with both Safaricom and Soliton Telmec among others.
Tim Ellis also indicated that the company is looking to deploy next generation solutions like G-Pon, triple play and provide solutions for mobile operators to support the deployment of LTE in the country.
In its last statement during the release of financial results, the group wrote;
“The network operations in East Africa continue to be challenged; however, there have been some positive improvements with regard to network stability and data centre performance over this period. This has had a material impact on key customer retention and acquisition in Kenya and across the region.”
Altech Group plans to sell 75% in its West African stake.