It's been a long road to solvency for the Altech Groups' former East African holdings, which have been part of Liquid Telecom since last April.
Now seven months at the helm, Ben Roberts, the acting CEO of Liquid, has managed to steer the East African operations back to financial safety, mended fences with contractors and started negotiations with bigger clients who had deserted the company in search of better services.
Liquid said the deal to buy up the East African facilities would create Africa's largest single fiber network, operating in Kenya, Uganda, Rwanda, Zambia, Zimbabwe, Botswana, DRC, Lesotho and South Africa.
The former Altech holdings have had a complicated history. Altech put a stake into the ground in the region when it scooped up the majority share of Kenya Data Networks in 2008, but by 2013 those operations were hemorrhaging money, its major clients had cancelled contracts, contractors had sued, and hiring of expatriate staff was dogged by allegations of racism. Staff morale was low.
As part of last year's deal, Altech took a minority stake in Liquid, but three weeks ago it gave that piece up, leaving Liquid on its own. Roberts answered questions about Liquid's strategy for the East Africa operations, and how the business is going. The following is an edited transcript of the interview.
IDGNS: Liquid Telecom had existing operations in Kenya, why buy Altech East Africa?
Roberts: As Liquid Telecom, we have built pretty similar companies in Southern Africa, we have rolled out fiber optic projects in Zimbabwe, Zambia and the Democratic Republic of Congo. Our operations were not as big or advanced as Altech East Africa. It was a tactical approach to buy, when Altech South Africa announced it was selling its regional operations.
IDGNS: How is Liquid Telecom East Africa different from Altech East Africa?
Roberts: When I joined as acting CEO, the biggest challenge I saw was the lack of operations harmony across different countries. In Liquid Telecom, the teams in Zimbabwe and SA were working together but it was not the case in East Africa.
The teams in Uganda were working in isolation from teams in Kenya or Rwanda; something was not right, we had to start building cooperation in order to build one network.
We have also worked on managing costs, network improvement, customer experience, reliable services and making it simple and easier for customers to configure regional services across the 11 countries we have operations.
We are looking at the basics of operational procedures in terms of maintenance for our network. I think Altech were avoiding spending money in the past so they were ignoring maintenance. We are upgrading the technology, the skills, and the operational procedures will increase
IDGNS: When Altech took over, it did away with the smaller customers who had been with KDN for a long time; is the company interested in SMEs now?
Roberts: Smaller customers are as important as the big ones. In other countries we have a wholesale and retail division, like in Zimbabwe. The retail company focuses on SMEs. We have segregated companies by products; (bigger companies are) in one folder and end users are in another folder but with the same company.
IDGNS: Race and expatriate hiring was a big issue in Altech East Africa, how has that changed?
Roberts: They were 25 expatriates when we took over before, but now Liquid Telecom has five expatriates out of 750 employees in Africa. However, we (have) employees from different countries working across the 11 countries we are operational in. We are against racial discrimination.
IDGNS: How do you describe the financial stability of the company?
Roberts: It has taken about seven months to get the point of steady growth of customer numbers. We are now breaking even and to be honest we thought it would take longer for the company to be stable again. We have many bridges to rebuild with contractors and customers. We are now back in better terms with Soliton Telemec, the company that built KDN fiber infrastructure, which had also sued KDN.
IDGNS: Kenya is a challenging market in itself -- how is it different from the other markets?
Roberts: In my previous role as CTO of Liquid Telecom, I have interacted extensively with Africa's international networks, Internet backbone, voice and data and I am familiar with the region. Kenya is different because it's a much bigger market and international companies are setting up their East African or African headquarters in the country. For example; IBM, Cisco and Microsoft among others.
South Africa is also (part) of an international hub but Kenya is very different and there is drive by the government. I could say it's challenging and competitive but also big and expanding
IDGNS: The Kenya Internet Exchange point is migrating it services to a Liquid Telecom data center, how will the public benefit?
Roberts: The Liquid Telecom Data Center covers over 2,000 square feet and has a world-class connection, redundant power and connectivity. KIXP previously suffered power outages, which can affect the market. With the wealth of connectivity, KIXP can compete with other IXPs like the Johannesburg IXP, which has connections from Botswana and Namibia.
We are very excited to be in the Kenyan market and we will further develop our relationship with the market.