Telkom Kenya’s mobile service, Orange, expects to have 1.5 million users by the end of next year and the former state-owned landline monopoly should make a profit in 2009, Deputy CEO Peter Reinartz said on Wednesday.

A consortium led by France Telecom bought a 51 percent stake in Telkom Kenya in 2007 with a view to overhauling the company, which had a reputation for high prices and poor services.

“It’s definitely been a challenge because it’s probably fair to say that Telkom Kenya is like an oil tanker, you don’t stop it in one hour,” Reinartz told Reuters in an interview.

“But when I see how the supertanker is now taking off and progressing I’m quite confident that 2009 will be back in black,” he said. “Yes, we will be profitable.”

Safaricom is the leading mobile provider in east Africa’s biggest economy with an 81 percent market share, or 12 million subscribers, followed by Zain with more than 3 million and Orange.

Reinartz said Orange, which has plastered the capital Nairobi with billboards promoting cheap calls, had snapped up 300,000 subscribers since launching on September 17 and should add another 100,000 by the end of December.

“If we pass the 400,000 mark by the end of this year, it would be probably disappointing if we don’t add another million during 2009. So I would say one-and-a-half million should definitely be reachable before the end of 2009,” he said.

Reinartz played down fears the global financial crisis would hurt its business in Kenya, saying while there might be an impact in due course there was little evidence yet.

“So far we don’t see an effect of the global financial crisis on our business in Kenya. We don’t see any downturn at this moment in business,” he said.

BROADBAND EXPLOSION

He reiterated that Telkom Kenya’s ambition was not just to be a third mobile operator in the east African country and would also focus on data services for business and retail customers to offer an integrated telecoms package.

“Our strategy remains to be the supermarket of telecommunications in Kenya,” he said, adding that the company was also eyeing a mobile money transfer service similar to Safaricom’s popular MPesa product.

Unlike nations in West and Southern Africa, which are served by undersea fibre optic cables, east African countries still rely on satellites for communications networks, making them slower and more expensive.

Telkom Kenya has stakes in submarine cables which are due to reach the port of Mombasa in the second half of 2009 and is hoping this will lead to a “paradigm shift” in the market.

“We definitely expect that the data market, and specifically the broadband market, will see an explosion once the submarine cables land,” Reinartz said. “Our aim is definitely to aim for the broadband segment of the market.”

The data services market in Kenya is set to become highly competitive as Safaricom, which is 40 percent owned by a Vodafone Group consortium, plans to target the sector to help offset falling average revenues per mobile user.

Source: africa.reuters.com/business/news; article courtesy Duncan Miriri and David Clarke