A Study of the Strategic Responses by Telkom Kenya Limited in a Competitive Environment

Abstract

The study was conducted by carrying out in-depth interviews with senior managers (respondents) of the company. The study intends to identify the strategic challenges facing Telkom Kenya Limited (TKL) and the responses TKL is using to cope with these challenges. Historically, Telecommunication Industry was dominated by the defunct Kenya Posts and Telecommunications Corporation, which remained a monopoly until its dissolution in 1999. Globalization and economic reforms in Kenya, which commenced in the 1990's, has led to the liberalization of the Telecommunication Industry. This shift of paradigm has created steep competition for TKL from experienced, newly licensed operators, providing close substitutes to telephony services offered by TKL. This study has confirmed that the company has put in place strategies to position itself ahead of competitors, but implementation of these strategies has been hampered by the following; (i) Lack of financing to continuously renew its Technological base and reduce staff to a level commensurate with the network size (the Government suspended any loaning from capital markets and banks pending completion of the privatization process). (ii) Bureaucratic processes and procedures have hampered the speed of doing things, which is not in line with the running of private sector businesses. The processes and procedures in place encourage the entrenchment of a civil service culture. v (iii) The attitude and culture of the employees has not changed from the public sector to a Private sector culture and the company is still government­ controlled. (iv) The Pension Scheme liability has weakened the financial base of the Company. (v) The management is not allowed to make strategic decisions and therefore, regardless of the strategies put in place, implementation presents a serious problem. The Company therefore cannot perform as well as expected. In view of these findings, the following would be the recommendations for Management consideration: I. There is need to lobby for the privatization of the Company so as to de-link the operations of the company from government in order to empower management to run the company on a commercial basis. II. There is need to reduce staff to a level commensurate with the company size in terms of number of lines and revenue. 111. There is need for a culture transition program in order to sensitize staff on the change to a private sector environment.