/ 14 May 2010

Opportunities come calling

Opportunities Come Calling

How do I grow beans?

“Single rows of 40cm by 15cm, one seed per hole.”

How do I grow maize and get a good yield?

“Avoid planting near cow peas.”

But market prices for maize are very low, what can I do?

“Study market trends. Join a farmer’s group and sell in bulk.”

As questions go, they are run-of-the mill for any farmer.

But Peter Keiyo, the agricultural adviser answering them, is about 150km away in Nairobi, in an air-conditioned office overlooked by clocks labelled Ontario, New York, London and Nairobi.

“I get 40 to 45 calls a day,” says Keiyo.

But Kencall, the $6-million-a-year company he has worked at for the past two years, gets thousands more. And not just from anxious farmers in Kenya’s Western Province.

The country is fast becoming the new name in outsourcing, doing everything from renewing cellphone contracts to helping consumers around the world get connected to the internet. And Kencall is leading the charge against more established businesses in India and the Philippines.

It was founded in 2004 by Nicholas Nesbitt, the great-grandson of a British engineer who went to Kenya to build the Ugandan railway. Nesbitt carved out a successful career for himself in the United States, where he took an MBA at Stanford and rose to become a vice-president at Qwest Communications. But after Kenya’s elections in 2002, he decided that the time was right to return home and start a business of his own.

“I could see that the world was changing. The world was getting flatter and I saw that Kenya had all the right ingredients to build a big business.”

There were many. At 40%, unemployment is high, meaning that employers can be very selective. Turnover of staff is low and the literacy rate is higher than India’s, where companies have traditionally centred their outsourcing operations. And with most primary-school and all secondary-school education conducted in Oxford-style English, Kenyans tend to be more understandable than their Indian counterparts.

But taking calls there first meant jumping several hurdles. The electricity supply was irregular and, with no fibre-optic cables in the country, Nesbitt needed a satellite connection to hook up to the internet. That meant going through Telkom Kenya, the state telecommunications company that had been deregulated eight years before but still acted as a monopoly.

“They were charging us $48 000 a month for a megabyte of bandwidth and they weren’t going to give us any service-level agreements,” he says. “We said there is no way we can set up a business with those costs, give us our own licence.”

Nesbitt ended up bringing the case to the ministry of telecommunications, where he argued that Telkom was violating the law by acting as a monopoly.
“It was a long battle, but finally we got our own satellite dish.”

Today the internet connection costs $600 and not because of that satellite connection. Last July the first of three undersea cables was laid and connected to Kenya, bringing affordable broadband to the country for the first time. Such was the expectation surrounding the switch-on that President Mwai Kibaki compared it with the completion of the Kenya-Uganda railway line more than 100 years ago.

That might sound a bit far-fetched, but the cable has transformed the way that Kencall and the country do business.

Other entrepreneurs have followed Kencall’s lead and set up technology-focused businesses themselves, with everything from cellphone applications to online pharmacies.

After doing $100 000 worth of business in the first year, mostly by taking orders from late-night US television advertisements, Kencall should make its $6-million turnover this year.

“The opportunities in Africa are immense,” says Nesbitt. “If only we can tackle some of the issues over perception, there is so much potential left to be unlocked.”