April 28th 2017

Top Stories / National

Shipping jobs to India, Airtel bosses take decisions that hurt Kenya business

As the firm brings more Indians to Africa, it reduces the number of Africans in senior positions by merging departments and making some country managers in charge of more than one country.

By Free Press Reporternewsdesk@kenyafreepress.comThursday, 19 Jan 2017 12:49 EAT

An Airtel shop in Nairobi.

Indian telecoms giant Bharti Airtel made a grand entry into Africa in June 2010 through the acquisition of Kuwaiti multinational Zain's operations in 15 African countries. Over the last seven or so years, Airtel has registered reasonable success in many markets although some of its units have lagged, enjoying limited market share even where they are profitable businesses on their own merit.

Kenya, which hosts the Africa headquarters of Airtel, is one such country. The company has built upon the business Zain bequeathed it, growing its subscriber base, market share and earnings, but it remains a much smaller player compared to the market leader. The firm's mixed success record is attributable in part to the dominance of Safaricom, which Kenyan authorities have failed to rein in to level the playing field.

In a well regulated market, Safaricom would have by now been declared a dominant player and governed as such. With more than 65 percent of the 40 million subscribers, 90 per cent of the sector's voice calls and text revenues, and a thriving mobile money and data portfolio, Safaricom has used its position to entrench cross-network pricing models its competitors can hardly survive in the long run. Study after study has been commissioned in respect of the firm’s recognised dominance, the results of which are never even made public.

But the tough market aside, we can authoritatively reveal today that Kenyan managers at Airtel have for years questioned several decisions imposed from India that undermine the business. Many are the managers who have left in a huff, but resentment between local and indian-born managers has reached fever pitch this month as the firm pursues policies the staff say undermine their own development and wider economic wellbeing of Kenya under the government’s nose.

The ongoing restructuring and job have brought staff morale to its lowest point, and a number of present and former workers at Airtel say the company is abusing Kenya’s robust but not well-enforced labour laws and economic governance. The decisions, insiders say, undercut the Kenyan business and could potentially cause Airtel problems with Kenyan tax authorities.

The job cuts have come at a heavy price to staff – certainly for the ones sacked but also for those who remain in service. The company has paid only a month’s salary in lieu of notice to the sacked employees, whose insurance cover will lapse with the end of their contract, whereas the practice is that large firms with group cover allow employees to enjoy health benefits for a limited time as they transition from the job.

With so many critical workers offloaded, several categories of staff who survived have been forced to give more than their fair share. Most senior managers have been demoted, with those who were in directors positions reassigned as heads of functional units, while those previously in that rank have moved down to managers post.

The reallocation of duties was done hastily and seldom took into account employees’ core competencies, so some workers have had to be deployed in areas where they have only limited skills. Others have been assigned two or three functions, their portfolio of work having been raised immediately their colleagues were sacked but without prior planning about the changes.

So severe is the staff shortage at Parkside Towers that some departments have threadbare personnel. For example, the IT department now has only two Kenyan technicians. To investigate any issue, which are received almost by the minute, the two workers have to raise tickets from remote-based Indian outsourcers. This understaffing has caused service lags when responding to customer problems given the time difference and the fact that some of the Indian-based staff work 8-hour days.

But even before the current job cuts, the company’s management practices were already making it hard for Airtel to maintain Kenyan and African managers, hence a higher than usual turnover of staff at director and senior management level. Most functional directors before the ongoing restructuring were acting in positions left vacant by their previous holders.

A month ago, the marketing director Josee Cremieux, who had joined from Airtel Congo following resignations, left the company, the last in a long list of managers that include Chales Wanjohi, (marketing), Dick Omondi (corporate affairs), Tom Shivo (human resources) and at least a dozen mid-level to senior managers, many of who left to join Safaricom, Orange or quit for other industries.

The exodus has affected not only Kenyan operations, which serves as Africa headquarters, but also functions with oversight over other markets. But the Kenyan business has suffered most, resulting in the review of the firm’s popular products and cutback of services that disgruntled insiders say are the bedrock of the firm’s competitiveness.

Two years ago, the company introduced the 'unliminet' products that allow subscribers to buy daily, weekly or monthly voice calls, text and data plans. The product raised Airtel’s revenues even though it also grew the firm's liability to Safaricom for interconnect charges. Airtel didn’t follow the product through or effectively market it in new media where gradually more Kenyans are, and its costs to Safaricom have been piling up quarter after quarter.

The same missteps are replicated in Airtel money business, where, to rival Safaricom, the company adopted an ambitious recruitment of agents and expensive link-ups with largescale firms rather than, in the opinion of some sources, pursuing vendors such as schools, hospitals and small shops which is where it could have tapped millions of customers.

The company is reported to have closed warehouses outside Nairobi, including those previously in Kisumu, Mombasa and Nyeri, and it has cancelled a distribution contract with a transport company, Jihan Freighters, which was core to its logistical services. Staff are unsure how merchandise will move with the company or whether the firm intends to provide essential services in its shops going forward, according to the sources.

A major grievance the Kenyan workers have against Airtel is its consistent absorption of Indian nationals throughout the business. Hundreds of jobs that were previously done by Kenyans directly have been shipped to India, and the company has a one-suit-fits all policy in regards to employment that Kenyans believe is best applied in countries like Chad and Gabon that have less technical capacity in IT, customer care, call centre and other related services.

The ‘Indianisation’ of Airtel’s Africa operations, as critics called it, has seen the firm deny jobs to Kenyans and engaged service contracts that insiders fear could be robbing Kenya of substantial investment and taxes. Airtel has outsourced major backbone and supportive services to India-based firms. Centum Learning, for example, does all training for Airtel staff that were previously handled by Kenyan and in some cases South African and British firms. Thanks to Airtel business, the company now operates in all countries where Airtel has a footprint, and its Africa headquarters are in the same building with Airtel at Parkside Towers, Mombasa Road.

Call centres once managed from Kenya have been outsourced to Ison BPO, another Indian company that also follows Airtel's Africa footprint and is headquartered in Nairobi. The companies have a seamless relationship with Airtel Africa, whose link with Airtel Kenya are also blurred, according to our sources.

But Airtel relies on India not only for contractors but direct management as well. Our sources claimed that more and more Indian managers have come to Africa in perhaps a sub conscious corporate policy that looks at the African business just an extension of Indian operations. Early in 2016, Christian de Faria, the MD & CEO of Airtel Africa, was displaced to the position of Executive Chairman, Airtel Africa, a role the firm said would support the vision of Airtel Africa and lead all matters relating to legal, regulatory affairs, shareholders as well as Mergers & Acquisitions.

At that time, Raghunath Mandava, an Indian national who was then serving as Customer Experience director for India and South Asia, was appointed as Chief Operating Officer (COO), Airtel Africa, based in Nairobi, with full responsibility for commercial operations. Less than a year later, Mr Mandava was promoted to be Managing Director and CEO of Airtel Africa, with effect from January 1, 2017.

As the firm brings more Indians to Africa, it reduces the number of Africans in senior positions by merging departments and making some country managers in charge of more than one country. In Kenya, the company merged the public relations and corporate social responsibility department with that of regulatory and legal affairs under one corporate affairs director, giving the role, in the words of one insider "responsibility over everything and nothing."

Airtel did not respond to email questions for this report.

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