AccessKenya to Cut Bandwidth Costs

Nation Reporter

16 June 2011

Nairobi — AccessKenya plans to cut the cost of bandwidth as part of its strategy to consolidate its market share.

The listed internet service provider expects this to help in pushing up its revenue, which has come under constant threat from fast-slipping customers.”We believe these strategies will improve our gross margin by between nine per cent and 10 per cent this year,” Mr David Somen, the company’s strategy and special projects director said Thursday.

The firm will also be looking at ways of minimising its foreign exchange exposure, as well cutting on operational costs.

In 2010, the company faced vicious price wars and the challenges of declining average revenues per user.

As a result, its full-year 2010 profit after tax fell from Sh147.9 million in 2009 to Sh7.9 million loss. This it attributed to higher interest costs and a foreign exchange loss, coupled with higher administrative expenses.

“Our projections are that this is going to be a better year, so much improved from last year,” noted Mr Somen at the sidelines of the firm’s annual general meeting held in Nairobi.

Competition in the industry has continued to be stiff with mobile operators led by Safaricom making big leaps into the sector.

Other Internet service providers like MTN Business Kenya and Kenya Data Networks have also stepped up their game, causing a major shift in market shares.

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