4 Feb 2009

Change at the head of Kenya's new mobile operator

I guess it was always going to be difficult finding a good way of taking over a blog, but I’ve been lucky with the news this week: as my colleague Joe Willcox handed this blog over to me, another figure in emerging telecoms market moved, someone I’ve crossed path with a couple of times while looking at the developments in Africa’s telecoms markets.
Michael Foley announced his departure this week from Essar Telecommunications in Kenya (formerly known as 3rd GSM licensee Econet Wireless), where he was CEO, citing personal reasons. In this position, Foley led the launch of new brand Yu, due to start services to consumers in the first week on April this year, coinciding with Informa Telecoms’ East Africa Com event in Nairobi.
Foley’s time at Essar/Yu has undoubtedly been a busy one. His job was to launch a new operator in one of Africa’s top 10 telecoms markets, applying a recipe that had until now flourished in India: building a low-cost, essentially outsourced operation and competing on price with a simple offering and a strong brand. A country-wide network was built in a record 6 months, and a new brand unveiled in November 2008 by Foley in Cape Town. He was in South Africa to give a refreshing keynote presentation at AfricaCom, in front of a captive audience including Michael Joseph, CEO of Kenya’s first operator Safaricom. A few months later, as services are set to launch in just a few weeks, he is replaced by his colleague Srinivasa Iyengar.
Foley’s tenure at Essar/Yu seems short: Kenyan newspaper The Standard notes that his resignation is happening “hardly a year since joining the firm”. Indeed, he seems to enjoy moving around. I first met him in 2006 in Tunis, where he was giving a presentation at GSM>3G North Africa (a congress now re-named North Africa Com and moved to Cairo) in his role as Chief Transformation Officer at incumbent Tunisie Telecom, a role he had taken as part of his position as Chief Commercial Officer at Emirates International Telecommunications. He then moved on to Celtel Nigeria as Chief Commercial Officer, then Celtel Tanzania as Managing Director, before joining Essar.
Reading through his profile, it seems he enjoys taking a challenge by looking after companies in times of change, as well as start-up operations and new business creation. Following his move from Kenya, I guess we could see him in one of the up-and-coming markets in Sub-Saharan Africa. A number of markets are due to see a new operator launch, or an old one go through a transformation following an acquisition. A number of them are in French-speaking countries, which is handy as Canadian-born Foley is francophone too. So the bets are open as to where we’ll see him next.
In the meantime, we’ll be looking closely at what happens to Kenya’s telecoms. Market leader Safaricom is confident in its position, thanks to a strong brand, good coverage and services that are increasing customer loyalty (mobile payment M-Pesa in particular); when asked recently where he saw his market share in 5 years time, CEO Michael Joseph said he was expecting to retain over 60%. Zain (rebranded from Celtel last year) is in a strong position as its main contender. A newcomer on the mobile market, Telkom is banking on triple play services to make its place in the market: in addition to its fixed services, the operator bought by France Telecom-Orange is now offering mobile services. With the launch of Yu, the market is likely to see a war price that will undoubtedly please the consumers, but may be difficult to sustain for the last two entrants.