Kutwa Tuesday: death of the cyber café

Once, long ago, I wrote a paper about a business case to put up a cyber café in an airport terminal – for transit passengers to browse there as they waited for the flight to connect. That model is in place today in airports all over the world (not my doing) but its’ time may already have passed with wi-fi zones and wireless laptops whose users don’t need to use cyber cafe facilities anymore.

But even cyber cafes’ that are in town may be under threat.

Until three months ago I’d spend about an hour in a cyber cafe each Saturday and Sunday. I’d go there to my check my-email and then browse quite a bit when I was done.

But all that has stopped as I now check my email and browse for information I need to know instantly – from hotmail, gmail, sports scores, stock prices - using a plain old phone (not bambanet, or blackberry) as the Safaricom EDGE service is available on most of their phones even some of the cheaper ones. I get the information wherever I am and don't have to visit a cyber cafe unless it's to print a document or download a PDF report.

Oil slick
The sale of Somken petrol stations to the National Oil Corporation of Kenya (NOCK) has been put on hold ever since the previous NOCK MD resigned from the company. Haggles remain over the high price bid for the stations.

BAT smoke-out
BAT Ghana has voluntarily de-listed from the Ghana Stock Exchange.

Does that portend anything for BAT Kenya one of the blue chip stocks on the Nairobi stock exchange and one of the highest paying dividend stocks? Cigarette smokers have had their smoking freedom curtailed in Nairobi and other urban areas (Nairobi city has less than a half dozen outdoor smoking points) making them clandestine smokers who hide on staircases and bathrooms (but at least most bars retain a smoking section). What impact will that have on sales?

BAT Kenya manufactures cigarettes here and exports a significant amount to other regional countries (who have not curtailed smoking) which should cushion it slightly from the new laws.

Stockbroker still frozen
The statutory management of Francis Thuo stockbrokers (by the Nairobi Stock Exchange) has been extended for another six months.

the pyramids that collapsed
Much has changed in the one year since nyramid schemes were highlighted here. Since then they have come under increasing pressure from the government, SACCO’s and most important the banks who frozen account necessary for their operations (and who probably still hold the schemes ‘missing billions’ that investors are crying for).

The latest collapse was Amity and it was preceded by Sasanet investment co-op (suspended operations), Spell investments (suspended operations), Circuit investments (suspended operations), CLIP (suspended operations), DECI (suspended operations), and the Kenya business community savings & credit society (Kenya akiba) (suspended operations)

Kenya news on Youtube
Some people say they are tired of political news, while others can’t get enough of it. But the Nation Media Group has gone ahead and made their new clips available on Youtube

Pesa point wins
Two yard ago Pesapoint was launched and it began a battle with Kenswitch - another network of banks sharing ATM facilities. But today Pesa Point has signed up most mid-size banks and have a network of almost 200 ATM machines – and last month added corporate banking giant Standard Chartered to their network.

Urgent need for Sub Cable

Whether it will be EASSy or TEAMS, the urgent need for East Africa to have a submarine cable will become apparent within a few years.

The 2006 merger of Intelsat and PanAmSat, creating the worlds' largest satellite provider, will have profound implications for Africa which is estimated to be 80% dependent on satellite communications. Higher costs can be expected from the giant company once existing agreements expire and ISP's will have no choice but to pass these own to consumers.

The government of Kenya broke away from other African countries (in EASSy) and has committed to the TEAMS project, budgeted at $100 million. It committed to pay $15 million this financial year and has contracted Standard Chartered bank to raise additional funding from ICT operators in the the private sector.

Easter weekend

No trades
I realized that I had not been to my stockbroker’s office to trade this year. It would be good to visit to find out the fate of my Stanbic shares. I’m not sure if I got a full allocation or a refund since I have not got any report from the broker. This week would be a good time to visit before the lines begin for the Access Kenya IPO which starts next week.

Access Kenya IPO
Access Kenya announced that their IPO will begin on April 19th. The company hopes to sell 80 million shares at 10 shillings ($0.14) each to raise 800 million shillings ($11.4m). I look forward to the prospectus to be released within the next few days to give a proper picture of the communications market. And we are also awaiting an IPO from Wananchi, Kenya’s largest ISP who unfortunately lost a bid for Africa Online to Telkom of South Africa.

The ISP industry has shown tremendous growth, but the sector faces additional challenges for investors.
- First like the Scangroup IPO, intangible measures take on greater significance in comparing the company against its peers and its future prospects.
- Second, an additional regulator comes into play i.e. the Communications Commission of Kenya. The sector has seen some turbulent investments that have not reached fruition including the third mobile operator (Econet in court for three years) and the second national operator (license has been awarded and canceled twice). Also CCK will in future move towards giving unified licenses, which means that that companies won’t have to go back to re-apply each time they want to introduce a new service.
- Third in a unified license world, and once a restructured Telkom has been sorted out, Safaricom and celtel may be the ISP companies of the future with their EDGE / GPRS offerings. (ISP’s are already complaining about mobile companies not playing fair with interconnection, leading back to the regulator again).

Corporate divorce
Alexander Forbes of SA has withdrawn its name from Alexander Forbes insurance brokers of Kenya citing a lack of majority equity or management control. The Kenyan operation (formerly Hyman Robertson) who already have a new name ready to launch, feel that they have been a good custodians of the brand, turning it around from loss making one to being one of the largest in East Africa.

Fading libraries?
Read in the Sunday Standard that the British Council was closing their library in Mombasa owing to declining memberships.

Battle for Africa Online

Telkom (South Africa) looks to emerge the winner in the battle for Africa Online after the African Lakes board (parent company) have accepted Telkom (SA)’s bid of £9.72 million (£25 per share) beating out Africa Telecoms Company (ATC) [which comprised Wananchi Online, Schneider Media and East Africa Capital Partners] who had offered £5.04 million (£18.50 per share)

While ATC had commited to move the company headquarters to Naiorbi, Telkom have not indicated their intentions for Kenya, as the Ethiopian and Malawian operations will be disposed of.

Meanwhile ATC will go ahead with its plans for laying out consumer broadband infrastructure to Kenya and other pan-African markets.