Renaissance Capital has maintained its rating on AccessKenya at “hold” after the service provider hit losses in 2010.
“Following the release of weak FY10 results, which showed revenue declining by 17 percent year-on-year, we do not expect a major recovery for the group this year,” Renaissance Capital said in a published report this week.
The analysts said that while telecom operators such as Safaricom have been increasing in their revenue through moving to data offerings in an effort to “offset falling revenues from voice, in the face of stiff competition,” AccessKenya remains on the outside looking in and this has adversely affected its profits.
“AccessKenya made a 2010 pretax loss of 5.35 million shillings ($64,000), after a profit of 182 million in 2009, pushing its shares to an all-time low of 7.10 shillings on March 29,” said Renaissance Capital.
Analysts in Kenya overwhelmingly agreed with the assumptions, saying that AccessKenya has not moved quick enough to mobilize other sectors of the telecom industry and that has seen customers move to other companies.
“We are witnessing what could be the final movement down for AccessKenya, so it will be extremely interesting to see what they can do to rebuild their image in the face of a lot of negativity,” said one analyst in Nairobi.