The government has fully acquired telecommunications firm Telkom. This is after it took over a 60 per cent stake that was being held by British firm Helios Investment Partners in a Sh. 6.09 billion deal.
This acquisition has now made Telkom a fully-fledged parastatal. This deal has now valued Telkom at Sh. 10 billion.
Telkom was first sold to French firm Orange, when it was privatized in 2007. Orange reportedly paid USD 390 million for the stake. In 2015, Orange sold its 60 per cent stake to Helios at an undisclosed fee.
According to data from the Communications Authority of Kenya, Telkom is ranked as the third largest telecommunications firm behind leaders Safaricom and Airtel.
Over the last one year, Telkom’s customers have thinned out in comparison to Safaricom and Airtel.
Data shows that at Telkom customers dropped from 4.23 million in 2019 to 3.42 million in June 2022. This was a drop of 19.1 per cent.
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Notably, Helios, the firm that had invested in Telkom has been exiting local businesses over the recent last few years.
In 2015, Helios exited the Equity Bank Group after selling its stake to the National Social Security Fund Uganda. It recently also exited from Vivo Energy after selling its stake to Vito Group.
The exit from Equity Group by Helios followed exits to Norwegian investment fund, Norfund and UK investment management firm, Genesis Investment Management LLP.
It is said that Helios told the National government that it would be exiting Telkom in August 2021 after the proposed merger between Telkom and Airtel was blocked by the government.
The local telecommunications market has been a rough ride for Telkom and Airtel as Safaricom has continued to dominate business and profitability.
Both Airtel and Telkom have launched several appeals to have Safaricom declared as a dominant player. The two have also been pushing to be allowed to share Safaricom’s infrastructure, a push that Safaricom has opposed and termed as an attempt to punish success.