(Thanks to @alykhansatchu of Rich.co.ke tweets)
KenCall, a leading East African call center company based in Kenya, is planning an initial public offering (IPO) on the Nairobi Stock Exchange (NSE) or the London Stock Exchange (LSE) (how feasible is this?) in 2011. With the landing of fibre-optic cables at the Kenyan cost this month, call center costs are expected to decline tremendously. With the increased internet speed, the company aims to generate sales of up to $10 million this year.
According to their website, KenCall operates 24 hours a day, 7 days a week, has over 600 employees (mostly recent graduates) and can scale up to 1,500 seats. KenCall has a world class facility in Nairobi and last month opened an office in London. The company has been in business since early 2005 but turned its first profit in April 2006 (still searching for the numbers) .but it has not been a smooth ride ever since either, the company has had several cashflow glitches.
Expansion plan
In the next 18 months the call center plans to triple its sales and to expand its operations in Africa. The firm is already building a second bigger office in Nairobi to boost its capacity and plans to open an office in Rwanda by the end to this year.
Call center services in East Africa have been limited by the mere fact that we are probably the last part of the planet not connected by the under sea internet cables and depends mainly on costly satellite links for internet. That’s until the recent landing of The East African Marine Systems (TEAMS) fibre-optic cable at Mombasa, closely followed by the East African Submarine Cable System (EASSy) and Seacom.
KenCall, a leading East African call center company based in Kenya, is planning an initial public offering (IPO) on the Nairobi Stock Exchange (NSE) or the London Stock Exchange (LSE) (how feasible is this?) in 2011. With the landing of fibre-optic cables at the Kenyan cost this month, call center costs are expected to decline tremendously. With the increased internet speed, the company aims to generate sales of up to $10 million this year.
According to their website, KenCall operates 24 hours a day, 7 days a week, has over 600 employees (mostly recent graduates) and can scale up to 1,500 seats. KenCall has a world class facility in Nairobi and last month opened an office in London. The company has been in business since early 2005 but turned its first profit in April 2006 (still searching for the numbers) .but it has not been a smooth ride ever since either, the company has had several cashflow glitches.
Expansion plan
In the next 18 months the call center plans to triple its sales and to expand its operations in Africa. The firm is already building a second bigger office in Nairobi to boost its capacity and plans to open an office in Rwanda by the end to this year.
Call center services in East Africa have been limited by the mere fact that we are probably the last part of the planet not connected by the under sea internet cables and depends mainly on costly satellite links for internet. That’s until the recent landing of The East African Marine Systems (TEAMS) fibre-optic cable at Mombasa, closely followed by the East African Submarine Cable System (EASSy) and Seacom.
14 comments
$ 10 million??? I didnt know just how big Kencall was
Mon Jul 20, 02:14:00 PM EATKainvestor? How comes you dont comment on my blog posts?
Mon Jul 20, 02:20:00 PM EATchegepreneur, i dont think US$ 10 is big....for a company with 600 employees. if they pay an average of $ 500 per month, then thier wage bill is us$ 3.6m already!
Mon Jul 20, 02:45:00 PM EATI'm very interested in how feasible it is to list in LSE.
Mon Jul 20, 04:18:00 PM EATThat said, I find it a tad disturbing that IPO's are the only way to release owners equity in Kenya, and as such, companies seem to list when they're at the end of their growth curve (Eveready, Safaricom etc).
@chegeprenuer: I agree with gathinga, $10 million is easily attainable by a company such as KenCall. And your site keeps on hanging half way through the word verification thing, so i can't post my comments, but i read all your posts :). please check it.
Mon Jul 20, 04:46:00 PM EAT@gathinga: But i doubt they pay any thing above $250 and the 600 number of employees could be a year's average (KenCall staff turnover is too high). Their average staff is about 120.
@kellie: I believe that LSE ambition is hot air. But unlike Eveready and Safaricom, KenCall may not be at the end of the its growth curve. But it could be on shaky grounds.
I have been working in a call center for the past 8 months or so and all I can say about the Kencall IPO is that it would appear to me that Kencall is merely trying to cash in on the IPO trend and make a killing knowing full well that brick and mortar call centers are fast becoming a thing of the past.
Tue Jul 21, 04:26:00 PM EATIn the past year or so India has dropped from the call center business and moved on to providing IT services, namely programming and back end tech support. Currently in the US more and more companies and closing down their brick and mortar call centers and outsourcing this to local companies who utilize the work at home model to reduce the astronomical costs of using a traditional call center.
As a result the costs have come down and local companies have realized the benefits of having a homegrown work force that their customers can relate to. With cloud computing as well on the rise this model is fast becoming the new trend. Check out www.liveops.com, www.westathome.com, these are a couple of the larger players in the market today.
Kencal needs to adapt its business model with the times, investing in a brick and mortar call center in my opinion is so 2007
i didnt know that kencall was such a big business?
Wed Jul 29, 06:16:00 PM EATAs for the London Stock Exchange, it is totally possible toe do so. It depends on where the management thinks where the IPO will do best
http://kenyantykoon.wordpress.com/
Ben:
Sat Aug 01, 08:43:00 PM EATThat's a very interesting comment you left.
Please go to my blog (kenyanentrepreneur.com) and read the Harvard Business School case study on that company. There's some interesting info there.
Also, drop me an email @kenyanentrepreneur@gmail.com - you seem to know quite a bit about this industry and I'd like to talk to you about it.
Thanks
@Ben, IPO Kenya after the Safaricom experience IPO in Kenya cannot necessarily be termed as a way of making a killing. Actually the subsequent Coop bank IPO made many companies which had lined up to list in NSE to take a pause.I think @kainvestor did a post on that issue. Probably the way KenCall is looking at it is a bit different
Sun Aug 02, 01:28:00 AM EAT@Ben Mkamba: thanks for the detailed inside analysis on how call centers work. probably kencall does that to ensure the quality of work is up to standard...then again the internet connection in kenya has been so bad and inaccessible until recently.
Tue Aug 04, 10:55:00 AM EAT@kenyantykoon: I won't hold my breath to the LSE listing...sounds like a castle in the air to me.
@KE: thanks for dropping by.
@kachwanya:Then again it doesn't matter what Kencall thinks...what matters is what investors think (investors sentiments)
I doubt Kencall's revenues are in the $10 million dollar range. The case study I read, put revenues in the $5 million dollar range, but I'm not sure what their gross is from that amount.
Fri Aug 07, 10:13:00 PM EATLink to case study here: http://www.kenyanentrepreneur.com/kencall
And remember, they took out loans to fund the company so in addition to removing their daily expenses, they also have to remove the money they are using to pay back these loans.
I think deciding to start the business in Kenya made their entire operation a lot more complex than it needed to be. Nick had to go through an enormous amount of hurdles to get that company off the ground.
I'm beginning to think it might be easier to set-up a BPO in a more conducive country, like Rwanda, but I'd be curious to hear your thoughts on that.
Rwanda for sure is not a good idea.
Mon Aug 17, 04:47:00 PM EATAm in the Call Center industry in Kenya.
Mon Aug 17, 06:08:00 PM EATBen the brick and motar model is driven by a company's service (product range). I disagree that this model is extinct though indeed there are new models emerging. In addition to your list check www.teletech.com.
BPO industry in Kenya has developed tremendously in the past 5 years. I believe with reason the entrance of new players such as Horizon only indicates the potential inherent. The fibre optic is definately a relief to co's such as Kencall who've relied on satelite links thereby losing lucractive clients who would've preferred fibre link connectivity.
IPO is one way but as you noted in the blog. It is largely dependant on how the investors see it. Let's give this industry a chance.
have all your questions on the BPO sector answered by the pioneer and guru of the industry. follow the links bellow;
Thu Sep 10, 12:23:00 PM EAThttp://www.moseskemibaro.com/?p=615
http://www.moseskemibaro.com/?p=624
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