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Orange’s entry was expected to change Telkom’s fortunes

By | May 19th 2009

By FJ Writer

In November 2007, a consortium led by France Telecom (FT) pipped seven firms to bag a majority stake in Telkom Kenya.

The Government then awarded the French firm with a 51 per cent stake worth $390 million.

FT won ahead of its closest rival Telkom South Africa.

Investment Secretary, Ms Esther Koimett.

"We got the highest bid from France Telecom…which is way above our reserve price…of $300 million, so we are very happy," Kenyan Investment Secretary Esther Koimett said.

The announcement closed a privatisation process that had been dogged by controversy since Telkom Kenya's inception in 1999. Seven firms had originally expressed interest in buying the Government controlled telecom company, but only four players actually placed their bids.

loss-making parastatal

The French firm partnership was expected to turn around the loss-making parastatal before the Government offloads an additional 30 per cent through an initial public offering at the Nairobi Stock Exchange.

A copy of the Telkom Orange letter to dealers that detailed the new commissions.

France Telecom Executive President Anne Bouverot described the success as a milestone and said the company already had a strategy in place to revive Telkom Kenya. The Government had spent more than 60 billion shillings in restructuring the company.

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Other contenders for the Telkom Kenya shareholding were Reliance Communication of India, South Africa's Telkom and LAP Fund of Libya.

Telkom Kenya, which has monopoly in the fixed line space with over 280,000 customers, was given a new license to launch mobile phone operations after France Telecom came on board.

FT is using its Orange brand in Kenya. The company now offers mobile, fixed-line, and internet services.

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