Celtel Kenya CEO Called Home As Profits Fall

By Eddson Lugangwa Posted 08 November 2006 @ 11:02 am EET     Print     Reprint     E-Mail     Comments

Nairobi (IBTimes.com) - Celtel Kenya's chief executive officer Gerhard May has been recalled to the Celtel International head office in Amsterdam, Netherlands.

Steve Torode, who is currently the regional vice president of Celtel International, takes over in the interim as CEO.

Mr. May's new appointment has come just as Celtel Kenya competitor Safaricom has posted the biggest profit ever made in East Africa - Ksh12.77 billion ($174 million) - edging out listed company East African Breweries Ltd (EABL) which used to be the biggest profit maker in the region. EABL made a pre-tax profit of Ksh9 billion ($123.3 million) for the year ending June.

Celtel Kenya's half-year after tax profits dropped to Ksh64 million ($890,00) in the first six months to June, from Ksh626 million ($8.7 million) in the same period last year. Mr May attributed the drop to depreciation of the Kenya shilling against major currencies.

Mr. May has been the Celtel Kenya CEO since 2005. He joined Celtel Kenya Ltd from Mobitel in Sudan where he was CEO in the joint venture between Celtel International and Sudatel. Prior to this, he had held various positions in the telecommunications industry in Africa. He was the chief commercial officer with Cell Com in South Africa and the managing director at Celtel Tanzania.

According to him, the company had invested heavily in upgrading its equipment and network, which coincided with the depreciation of the local currency.

"This affected our profits, because most of the equipment used was imported," he said.

During his tenure, Mr May has overseen several developments at the firm among them the successful rebranding countrywide, expansion of network to cover rural areas and the launch of various successful services and products. During the same period, Celtel made its major breakthrough by launching One Network across East Africa.

While Celtel pursues the corporate sector, its competitor, Safaricom, with a subscriber base of about four million, targets the mass market. Safaricom has derived most of its growth from airtime sales, especially the introduction of the lower denomination top-up cards.

Celtel's subscriber base is 2.1 million. The company plans to spend Ksh7 billion ($95.9 million) on its network this year to cater for growth of customers to an estimated 3.2 million. Celtel's postpaid customers are growing more rapidly than the prepaid subscribers. The company will now focus on growing its revenues and market share by rolling out more products.

Celtel is the most successful pan-African mobile network, offering telecommunications services in more countries than any other on the continent. It has more than 8 million customers.