Access Kenya Company Ltd Market Annalysis Essay Example

identify strengths. One major strength of Access Kenya is its market niche in serving both corporate and residential clients, particularly organizations.

Organizations are the largest consumers of internet services in Kenya due to the increasing demand for activities like emailing, web research, and video conferencing in offices. Therefore, focusing on this market segment can result in substantial profits for any company. Having 10 years of experience delivering corporate internet solutions and being a dominant player in the market over the last five years puts our company in an ideal position to address organizations' connectivity requirements.

Access offers personalized services to meet the unique needs of their clients. They provide tailored solutions and a selection of products based on the client's income, allowing them to choose the package that best fits their requirements. Access charges a fixed monthly fee for these services and also provides after-sales support.

For a nominal fee, AccessKenya provides assistance to customers in setting up a secure Virtual Private Network (VPN) which allows them to access their office network while working from home. AccessKenya has a unique advantage as both a service provider and operator, offering connectivity services and IT solutions to clients. Since acquiring an IT Services company in 2007, they have been able to offer a comprehensive solution that includes both core connectivity and IT infrastructure management. With a team of over 70 technical experts skilled in various areas such as Cisco, Microsoft, Linux, IBM, Oracle, Netapp, etc., AccessKenya can quickly resolve any issues.

Their primary IT services encompass managing local area networks (LAN), which includes desktops, workstations, and peripherals. They also manage wide area networks (WAN), all interstice connectivity, firewalls, internet connectivity, and

offer support protection. Additionally, as a backup to their client's IT team, they provide emergency support for situations that the team may be unable to manage.

Offsite Backup is crucial to any company's Disaster Recovery plan. To ensure business continuity in the event of a disaster, it is essential to have secure, offsite data backup in a data centre environment. In addition to their core internet service provider business, Access Kenya Company Limited has invested in adding value through the installation of CCTV cameras in Nairobi and Mombasa along main roads. This free online service allows anyone to check traffic and avoid congested routes within the city.

There are two weaknesses in this company. The first is that they have a limited area of coverage, only serving Nairobi and Mombasa. This means they cannot provide services to corporate customers in other parts of the country, potentially losing out on potential customers who have heard about their good services. Secondly, the company has financial constraints and has experienced losses during its operations. A Daily Nation report shows that the company's share price at the Nairobi Stock Exchange fell below its initial public offering price of Sh10 and their 2010 profit after tax decreased from Sh147.

The company experienced a significant decrease in profits between 2009, when they made 9 million, and the financial period ending on December 31. They went from a profit before tax of Sh182.3 million to a loss of Sh5 and ended up with a total loss of Sh7.9 million for that period.

There was a 17.5% decrease in turnover from Sh2.07 billion in the previous financial year to Sh1.7 billion, and 3 million was recorded.

The firm's

loss in 2010 was due to higher interest costs, a foreign exchange loss, and increased administrative expenses, all of which were attributed to the challenging year for the telecommunications and data industry with extreme competition and price wars. Executive director David Somen issued a statement to the NSE highlighting the impact of the profit warning issued in December, which lowered investor confidence and affected the share price. The firm faces growing competition from nimble rivals that threaten its position in the market.

Mobile operators, including Safaricom, as well as corporate ISPs such as MTN Business Kenya and Kenya Data Networks, are shaking up the market and causing a significant shift in market shares. KDN has moved its mass market business to its sister company SwiftGlobal, to focus on wholesale and corporate business - an area of strength for AccessKenya. The Wananchi Group has also increased its activities recently. With over 15 internet service providers in Kenya, any company that falls behind risks being overtaken by rivals, posing a major challenge to Access Kenya, the current market leader. Access Kenya is banking on increased home ownership to boost internet access as it competes with telecoms firms that are lowering connection costs.

As a telecommunications company in Kenya, Access Kenya is subject to government regulation through the Communications Commission of Kenya (CCK), a state-owned corporation. The CCK is responsible for promoting fairness in the airwaves and serves as the independent regulatory authority for Kenya's communications industry. Its primary functions include licensing and regulating telecommunications services, radio communication, and postal/courier services throughout the country.

The Communications Authority of Kenya (CA) is responsible for issuing licenses to Internet Service Providers (ISP's)

and other communication devices that use unlicensed frequencies. Additionally, it develops and coordinates policies and strategies for telecommunications services in Kenya. However, licensees perceive regulatory and licensing frameworks as hindrances to internet development. An analysis shows that factors like unfair competition regulation, mismanagement of frequency spectrum, bureaucratic delays in licensing processes, biased licensing, and the issuance of stand-alone licenses prevent growth in the Internet market. To address these issues, the regulator can enhance the fairness, transparency, efficiency, and effectiveness of licensing and regulatory processes, procedures, and decisions.

3. Dispersion - Kenya is a developing country with limited computer literacy skills among its citizens, making it difficult for internet service providers to expand their market share. Despite comparable internet penetration levels to other countries with low income and low average internet use, Kenya is far behind middle and high-income comparator countries. This is due to the lack of a deliberate and focused internet strategy for national socio-economic development plans. In contrast, countries like Morocco invested heavily in ICTs since 2004 to support key sectors like the business process outsourcing (BPO) industry.

We suggest that Kenya creates and executes an Internet strategy that is directly connected to the crucial national socioeconomic development plans. According to our projections based on supply-side data, if the correct strategy is implemented, the number of Internet users in Kenya can increase from the current estimate of 2.7 million to roughly 8 million. This increase is over double the current penetration level and comparable to middle income countries like Morocco.

A national demand baseline survey using the Partnership for Measuring ICT for Development Framework4 is recommended to obtain a better estimate that includes additional data

from the demand side. Unfortunately, internet tariffs have remained high since the end of the exclusivity period. Moreover, due to the hierarchical design of Internet service provision, end-users face high costs, as each tier of operators and service providers create margins with limited value addition and sometimes degrade quality of service. For example, IBGOs/CVOs connect two customers using 1 Mb/s links for every 1 Mb/s purchased from the global Internet, and ISPs connect about six customers using 1 Mb/s links for every 1 Mb/s purchased from the IBGOs. Thus, by the time it reaches the customer, the quality of service has been degraded by a factor of twelve.

OPPORTUNITIES: Access Kenya has several opportunities to increase their market share by targeting partnerships. The company has collaborated with Housing Finance to improve internet connectivity and cater to the demand for home value addition among homebuyers. According to Access Kenya's MD Kris Senanu, this collaboration will enhance the company's home connectivity, a significant aspect of its operations. The initiative targets high-end homes and corporate clients.

Housing Finance's decision to connect their developed properties to internet services is anticipated to boost home internet use. Additionally, the company plans to extend its reach by offering its services to commercial properties like office blocks, retail shopping centers, and hospitality and educational facilities. This move is expected to heighten competition with rival internet service provider, Wananchi.

Furthermore, as more students are reliant on the internet for learning, Housing Finance can target higher education institutions like universities to integrate their infrastructure, thereby expanding their market share significantly.

RECOMMENDATIONS
1. The company should expand its services to meet the needs of its residential clients by incorporating

Pay TV.
2. To target corporate clients, the company could diversify its product line by providing services such as web hosting, web designing, and software development.

One strategy for businesses facing increased competition in the market is to search for a wholesale internet provider that can offer lower costs to customers. This can help retain customers who may be considering switching to competitors that are pursuing a market leadership strategy. Reference: Access Kenya Website: www.

On accesskenya.com, there is a research paper titled "Has the Internet Increased Trade? Evidence from Industrial and Developing Countries" by George Clarke and Scott Wallsten, published by the World Bank Policy Research Working Paper 3215 in Washington, DC.

The communication journal "Communications of the Association for Information Systems" published a report in 2004 titled "Global Diffusion of the Internet IV: The Internet in Ghana" by Foster, William and other authors. This information was featured in issue number 547 of the Daily Nation newspaper on March 25, 2014.