Kenya: Mobile operators battle it out for top talent

The planned entry of two players into Kenya’s mobile phone market has sparked an intense battle for talent in the telecoms sector.
France Télécom’s-owned Telkom Kenya and Econet Wireless have roiled the labour market in the sector as they shop for key talent needed for the launch of their businesses.

Already, Safaricom and Celtel Kenya are facing problems recruiting telecoms engineers, with the former entering a training deal with local universities.

Positions that are facing shortages include those for telecoms engineers, sales people and marketers with industry experience.

As a result, the new entrants have trained their focus on Safaricom’s and Celtel’s staff ranks, setting the stage for a period of employee poaching, which could spark an increase in staff costs. Both Telkom and Econet (and especially the latter) are expected to set up network infrastructure to support the roll out of their services and an extensive distribution network to commercialize their operations.

If these two networks are successful, they could open employment opportunities in services support sector in a manner reminiscent of the effect that Safaricom and Celtel generated when they launched. In the last eight years, these two companies have not only modernized communication infrastructure and increased the pace of business communication and transactions, but also created thousands of jobs indirectly.

Econet Wireless, which is partly owned by India’s Essar, is set to roll out its mobile services in July, while Telkom Kenya, owned 51 per cent by France Telecom, is planning a rollout in September.

High alert

Sources at Celtel and Safaricom told the Business Daily that the twin firms are on high alert following increased approaches on their critical staff from Econet Wireless and Telkom Kenya.

“There is talk that a number of our sales people and engineers have been approached, but we are yet to confirm this,” said a source at Celtel.

At Safaricom, the chief executive, Mr Michael Joseph, confirmed that attempts to poach marketers and engineers from the firm had risen in recent months.

“The market is very keen to poach from Safaricom, but so far they are not successful,” he said on Friday.

With Safaricom having emerged as the most profitable firm in the region, players in the sector are increasingly focusing their attention on the firm’s staff. The mobile telephony, for the third year running, posted historic results that saw its net profit hit Sh13.8 billion for the year ended March, reflecting a 15.3 per cent increase.

The firm is said to have upped the salaries of its key staff besides offering other perks such as generous health benefits in an attempt to ring fence in its most critical talent.

Celtel is also offering better terms to its employees to ward off interests for its key staff.

But Telkom Kenya and Econet Wireless are dangling bigger pay cheques in a move that will make mid-level executives in the telecoms industry one of the best paid in the region.

“Quality staffing is critical in our turnaround plan and TKL (Telkom Kenya) will ensure we have the best,” said Mr Dominic Saint-Jean, the chief executive of Telkom Kenya.

Sources at Telkom Kenya say that the hitherto low paying firm has nearly doubled the pay of its middle managers over the past year to match Safaricom and Celtel in the battle for talent which comes at a time when human capital is emerging as the most sought after resource in the local telecoms market and an arsenal for market growth.

The need for experienced sales and marketers in the telecoms is informed by the dynamic nature of the mobile telephony market that calls for the players to have an efficient airtime distribution network and increased brand visibility in the market place.

As a result, sales and marketers who understand the mobile telephony marketing terrain backed by a multi-million shilling advertising blitz has turned to be the differentiating factor in the battle for subscribers.

Safaricom seems to have perfected this art with adverts that excite nationalistic passion besides striking a chord with the common man on the street, which in part is attributed to the profit juggernaut that has become of Safaricom.

It is this market position that has seen Celtel trail Safaricom on the profit front and on subscriber numbers despite the two firms having entered the market place about the same time.

Celtel reported a loss of Sh1.5 billion in 2007 on revenues of Sh14 billion. It has about four million subscribers compared to Safaricom’s 10.4 million.

“Competition is expected to be stiff and mobile phone operators must advertise heavily to boost their visibility of new products,” says Mr Vincent Mutavi, the country manager of Psitek, a regional telecommunication firm.

Big ad-spend

This is well captured by the fact that telecom firms run the largest advertising budgets in the region with Safaricom leading the pack with a market spend of Sh1.6 billion, according to Steadman Group.

For engineers, their high demand is attributed to the rapid network expansion plans coupled with the need for maintenance engineers who are critical in ensuring quality service.

Besides the rollout by the new entrants, Safaricom and Celtel are also set to boost their footprint in the under-served rural areas as they strive to have a national coverage.

The spike in demand for telecom engineers comes at a time when the industry has been reeling from a shortage of the engineers as local universities have not been churning graduates with hands-on-knowledge on telecommunication engineering.

As result, Safaricom and Celtel have turned on in house training, and Telkom Kenya and Econet Wireless can only turn to the two firms as the race to assemble their engineering staff gathers pace over the next two months.

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