Did you know that Kenya exported telecoms equipment to US and Europe?


gvkthwf9rar3h3vevs593f76dd60eeb Did you know that Kenya exported telecoms equipment to US and Europe?

Before turning Orange and now to blue and yellow, Telkom Kenya was once part of a brand with a fabled history that saw Kenya export telecommunication equipment to the US and Europe.

Then under the umbrella of the Kenya Posts and Telecommunications Company (KPTC), the firm was locally manufacturing telecommunication equipment for export at the Gilgil Telecommunications Industries, now defunct Gilgil Multipurpose Manufacturing Complex.

The factory had been birthed in 1987 following the inking of a Sh86 million deal between the corporation and ISKRA Commerce, a manufacturing firm from the former Yugoslavia tasked to build and train staff at the plant.

The telco plant was a result of President Daniel Arap Moi’s 1982 trip to Yugoslavia which he inaugurated in December 5, 1988. It would manufacture switchboards, telephone sets, power units and cables.

Telephone sets

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The corporation’s chairman John .N. Kariuki projected that the factory would produce 100,000 telephone sets per year.

In the same December, KPTC entered an agreement with global telco giant American Telephone and Telegraph (AT & T) that would see it export telecommunication equipment to the USA and Europe from the Gilgil factory.

The three-year contract, tipped to earn Kenya Sh60 million, would see the corporation supply AT&T with cable forms for use in its plants abroad. The Standard reported on the uniqueness of the project as the “first and the only one of its kind in sub-Saharan Africa.”

“Just a quarter century after independence, Kenya is able to supply countries which were the original suppliers of such equipment,” wrote the Standard.

The Corporation Managing Director Kipng’eno Ng’eny said it was “symbolic of what was to come in the future.” AT&T’s International Sales Manager John Sihra praised the “high quality of equipment” made at Gilgil.

Foreign currency

Almost a year later, the Minister for Transport and Communication John Kamotho said Kenya had saved Sh343 million in foreign currency over the last three years because of local production of telco equipment at Gilgil.

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The plant had over the period assembled 1,800 switchboards, 1,000 power units, 30,000 telephones and 8,400 cable pieces. By then KPTC was splashing millions yearly for advertising.

Later that year, press reports emerged that KPTC was seeking a loan from African Development Bank to fund expansion of the manufacturing complex. The funds were meant to meet ‘expected demands’ in Europe and the US. The Finance Minister Mathias Keah said the amount would be over Sh110 million.

In the same year, 1989, the corporation’s managing director announced that Japan would soon start assembling and manufacturing equipment in Kenya. The 1990s heralded a turbulent decade for the KPTC including the cellular era.

Mr Ng’eny, rebutted accusations that they were producing substandard telephone equipment. He said their products were “competing favourably in the market.” However, the corporation had put in austerity measures and cut off sponsoring of programmes in the Voice of Kenya (VoK) Television and Radio (now KBC). 

Mr Ng’eny called this “re-organisation” and also announced that they were spending over Sh487 million to build a “35-storey” head office along Nairobi’s Kenyatta Avenue.

In June 199, Joseph Kamotho announced a liberalisation programme. Now, people who wanted to install telephones in their houses or offices could now hire private engineers.

Calls to split the corporation were also gaining ground with the then Finance Minister Musalia Mudavadi saying that “a fundamental restructuring” had been initiated to break the corporation into separate entities.

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This was six days after the long serving Mr Ng’eny was “forced” to retirement. An editorial by The East African Standard (now the Standard) blamed him for the corporation’s woes.

Under Mr Ng’eny, it said, the corporation was run like “a private empire.”  Bosses seemed accountable only to forces outside the corporation and showed little regard to taxpayers, it said.

By then, massive layoffs were underway. Workers protested, some demanding the corporation “retire Ng’eny kin first.” Meanwhile, more than 300 workers in Mombasa were being forced out of staff houses rented by the corporation.

The Parliamentary Public Investment Committee would later in 1994 accuse Mr Ng’eny of awarding contracts behind the backs of the board of directors.

The Gilgil plant, however, remained bullish with The East African Standard reporting in April 15 1994 that it had registered Sh230 million sales over the last six months.

The manager, John Musonik, expected it to double sales the next financial year and become fully self-sustaining in the next five years. By 1996, the corporation, had concluded the liberalisation of the supply, installation and maintenance of mobile cellular telephone sets.

In July 1 1999, the privatisation of the Kenyan communication sector took a major step after Telkom Kenya, its subsidiary Safaricom and the Postal Corporation received their 25-year trade licenses from the defunct Communications Commission of Kenya, now Communications Authority of Kenya.

Telkom Kenya would become a telecommunications service provider while Safaricom would concentrate on the cellular market. Telkom Kenya would initially own a 60 per cent stake at Safaricom.

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