Orange Telecom could soon find itself in a tight position, after details emerged of a possible cancellation of a lucrative contract between it and the Kenya government, over France Telecom’s plan to exit the Kenyan market.

According to the Nation Newspaper, the cabinet secretary for Information and Communications, Dr Fred Matiang’i, last week gave a notice to Orange Kenya informing the company of the ministry’s intention to terminate the telco’s contract in which it manages a state-owned national fibre network.

With France Telecom and the Kenya government being the joint proprietors of Orange Kenya, the latter seems to have not taken the news of France Telecom's plans to exit the country, and has since moved to prepare for any eventuality.

“I propose to terminate the contract on substantial public interest concerns and the future of ICT in Kenya,” Matiang’i said in the letter sent to Orange Kenya.

Orange Kenya has been the principal manager of the National Optic Fibre Backbone Infrastructure (NOFBI), with the extension of the contract having been last year July for another period of three years.

The company has been generating revenues from the optic network by leasing it to other operators in the country in providing data services to remote parts of the nation where there was virtually no other optic cable connection.

As at July last year, NOFBI was connecting at least 29 remote counties in the East African nation. The Kenyan government has also been putting in place strategies on how to deliver e-government services in these areas via NOFBI, and the recent developments could mean a delay in the execution of the plans.

Orange Kenya has been performing poorly over the last years, with the company recording a loss of Kshs9.1 billion in the last financial year.

This, coupled up with increasing competition from the other operators and also the recent announcement by Essar Telecom to close down its operations in East Africa, could have led to France Telecom’s decision to explore the exit plan.