Altech KDN strengthens network
BUSINESS| Oct. 5, 2012, 6:02 a.m.
By Semaj Itosno, Nairobi, Kenya
Altech KDN has expressed optimism for its business performance due to enhanced infrastructure. With presence in 21 countries, the group posted revenue increase of 6.8%.
According to Shahab Meshki, CEO of Altech KDN, the company has managed to improve its network uptime, making it more secure and reliable for the provision of broadband services.
“Our network stability recently improved from 83% to its current 98% – targeting industry standards of up to 99.9%. And because of our regional resource deployment and collaboration, this has strengthened our sales and technical expertise,” said Meshki.
He said the company’s overall strategy had changed and the focus of the business was to now offer customised services for the different industry sectors of the economy. This was illustrated by the steady uptake of data centre services with the first floor of the new Altech Sameer East Africa Data Centre having been sold out and customers requesting additional capacity for their data.
Craig Venter, speaking last week during the release of the group’s financial results for the six month period ended 31 August 2012 said the Telecommunications and Wireless Communications Division, which consists of Altech Autopage Cellular (including Altech Technology Concepts) and Altech Netstar, performed as predicted.
Altech Autopage Cellular’s operating profit increased by 3.7% while revenue increased only marginally due to the contraction of Global System for Mobile communications (GSM) airtime revenue and slower than expected Internet Service Provider (ISP) revenue growth. This has however, been mitigated by increased prepaid and Value Added Services (VAS) revenues.
Venter said the GSM data remained strong with 26% subscriber growth on the previous period due to aggressive data pricing propositions in the market and GSM customer churn has been reduced to single digits in the reporting period due to tighter credit management, improved customer service and retention, and a focus on consumer growth in higher value channels:
“Our continued focus on expense management in the business will realise efficiencies and cost savings in the second half of the year to mitigate the pressure on gross margin. Coupled to this, the successful integration of Altech Technology Concepts into Altech Autopage Cellular will allow for further converged product launches across distribution channels to consumer and business customers in the second half of the year.”
The Converged Services and Connectivity Division, which consists of Altech Alcom Radio Distributors, Altech Fleetcall, Altech Alcom Matomo, and the East Africa operations presented mixed results.
Although there were challenges in network operations in East Africa, Venter highlighted some of the positive improvements with regard to network stability and data centre performance over the period. “This has had a material impact on key customer retention and acquisition in Kenya and across the region,” he said.
The Multi-media and Electronics Division, which consists of Altech Multimedia and Arrow Altech Distribution, performed as expected for the period, with Arrow Altech Distribution maintaining its 30% market share in a very competitive environment.
Venter said the operation’s strategy to expand into providing mobile applications has resulted in the award of contracts that were currently being executed as the initiative were expected to contribute substantially going forward with further growth expected from its existing product offering.
“On the whole, our operations in South Africa and some international operations are performing well despite the continuing adverse economic conditions. Of concern are our operations in East Africa and I am confident that we will address these challenges with the major focus going forward being growth of the revenue line while reducing customer churn and managing expenditure,” said Venter.
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