QUICKTEL TO MODERNISE GILGIL PHONE PLANT IN KENYA
The Egyptian telecommunications company Quicktel that won the bid to jointly manage Telkom Kenya's subsidiary Gilgil Telecommunications Industry (GTI,) is expected to modernise the Gilgil-based complex and make it a regional player in the sub-Saharan market.
According to Sammy Kirui, Telkom's managing director, the joint venture will allowTelkom Kenya to source products from the plant at cost price. "Telkom will also have access to modern equipment that it currently imports from the Far East and Europe thus make a huge saving on capital expenditure as it responds to a growing telecommunication market," said Kirui.
Quicktel has a successful track record in acquiring privatised telecommunications manufacturing facilities and companies in Africa. The company is design-oriented and licensed to produce its own equipment in the fields of CDMA, test equipment, passive network solutions and switching systems.
Over the years, Quicktel has formed strategic alliances with blue chip technology companies. Companies that Quicktel has built partnerships with include Minnesota-based 3M telecommunications company - a diversified technology firm that manufactures, assembles and supplies 3M's distribution boxes. Germany-based technology firm Krone Gmbh is another telecommunication company that manufactures connectivity products for copper and optical fibres.
According to the bid terms, Quicktel acquires a controlling stake of 70 per cent and gets to bring in a new management team, while Telkom Kenya will retain a 30 per cent stake. Quicktel, also a 70 per cent owner of the Egyptian Telephone Company beat other bidders after offering to pay $24 million for the complex. The company has proposed to pay 20 per cent of the amount up front, while the balance will be staggered over the next five years.
Kirui said only two firms, Quicktel and Muringa Holdings, had qualified for the bid. Muringa Holdings' technical assessment failed to attract the mandatory 75 per cent required, said Kirui. The other losers were Kenya Power & Lighting Company, Timber Treatment International, Treated Timber Products and Sao Hill of Tanzania.
Quicktel, which was established in the early 1960s to cater for a growing demand for telephone sets and switche,s is a leading Egyptian telecommunications company specialising in manufacturing and provision of advanced solutions for the fixed telecommunication networks.
The company boasts an impressive array of own brands of products. Its product portfolio includes cordless telephone sets, CDMA fixed wireless terminals, fixed phones, mobiles, GSM wireless phones, distribution boxes and steel cabinets. The company has also set up a manufacturing plant with backing from the Swedish global conglomerate Ericsson.
Initially, the Egyptian Telephone Company was publicly-owned but in 2000, it was taken private and Quicktel acquired 70 per cent of the company and took over its management.
The revamped GTI complex will create direct jobs for both skilled and unskilled labour in addition to training opportunities for technicians and information technology personnel in Kenya. The GTI complex was established in 1991 to assemble and manufacture telecommunications-related products for the defunct Kenya Posts & Telecommunications Corporation. Gilgil was chosen as part of the government's efforts to encourage the location of industries away from the major urban centres to stem rural urban migration.
The complex comprises mechanical, electronics and carpentry workshops, a maintenance centre and a pole treatment plant. It assembles, manufactures and sells its products to a variety of customers ranging from government ministries and departments, to telecommunication companies, flower farms, the Kenya Power and Lighting Company and educational institutions.
When it was established, GTI had a ready market; however, liberalisation of the telecommunications market presented competition as other players were licensed to procure and sell end user products (like telephone sets) that were also being assembled at GTI. This, coupled with bureaucratic procedures and late response to changes in technology dulled GTI's competitiveness in a highly liberalised environment.
(SOURCE: The East African)
