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Liquid Telecom purges resellers to stem pilferage

Wednesday May 31 2017

Liquid Telecom Kenya chairman Ben Roberts (right) on May 30, 2017. PHOTO | SALATON NJAU | NMG

Liquid Telecom Kenya chairman Ben Roberts (right) on May 30, 2017. PHOTO | SALATON NJAU | NMG  

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Internet service provider Liquid Telecom Kenya stemmed annual revenue losses of up to Sh93.1 million ($900,000) by chasing corrupt resellers that were facilitating illegal connections.

Liquid Telecom said it had been auditing its networks and contracts to identify illegal and ghost Internet connections that spawned massive revenue losses.

The South African company said the illegal connections were among the corrupt and unethical practices that it inherited when it acquired the Kenyan business from Kenya Data Networks (KDN) in 2013.

“We have always had a zero tolerance for corruption… having inherited a company, we didn’t expect to find that. This has been the first time we’ve had to deal with that,” said Kenya chairman Ben Roberts.

Mr Roberts estimated that Liquid was losing at least Sh7.8 million ($75,000) per month at the height of the problem. He said the illegal resale of the company’s services had been going on since 2009 but had been curbed by 2015.

Liquid bought KDN from Altech in 2013.

Mostly due to concerns over illegal connections, Liquid Telecom dropped 15 of its 35 resellers in 2015. The firm also vetted its 1,400 suppliers and dropped some of them due to ethical concerns.

Employees have also been affected. In 2016, Liquid reported 14 disciplinary cases among its staff due to concerns that included theft, gross negligence, breach of procedures and alcoholism. Four of the staff were fired while two were charged.

Since Liquid’s acquisition of the Kenyan unit, the company has undergone infrastructure investments worth more than Sh20.3 billion.

The investments and the internal overhaul have borne fruit as Liquid recorded 15 per cent revenue growth in the year to February 2017, up from nine per cent in the year to February 2015.