Kenya’s government is mounting pressure on Telkom Kenya, a telco it jointly owns with France Telecom, to reduce its expatriate staff in a bid to end the firm’s loss-making streak.

This is one of the conditions the Kenyan government has attached to a $29 million financing plan for the struggling telecoms unit, which says it has 2.8 million customers using its GSM, fixed and CDMA networks.

The Kenyan government has a 40% stake in Telkom Kenya, while France Telecom owns 60% of the firm.

Telkom Kenya has struggled to compete in a market dominated by big mobile operators such as Safaricom. The Communications Commission of Kenya says the country has 28.08 million mobile subscribers, and Safaricom claims it has an over 65% share of this market.

Last year, Telkom Kenya made $106 million in revenues, but recorded a $209 million net loss.

And Kenya's Finance minister Njeru Githae has attributed the firm’s poor performance to foreign employees who ‘lack knowledge of the local market’.

“We need to change the business orientation instead of all top offices being held by people from France who haven’t understood the local business environment.” said Githae.

Telkom Kenya is currently headed by Mickael Ghosein a French national as chief executive officer and deputised by Bruno Allassonniere. Other expats such as Yvan Ridard are chief technical and information officer, while Vincent Camadro holds the firm’s marketing and strategy post.

“Telkom should employ Kenyans who understand the dynamics of the local market. They can keep the position of chief executive, but I do not understand why somebody like the marketing manager should be a foreigner,” said minister Githae.

Minister Githae has also hit out at the firms high number of employees, which he said do not match its revenues.

“Their labour force is bloated and if you compare the turnover at both Safaricom and Telkom Kenya with their respective employee count, you will see that not much can be achieved with Telkom’s employee numbers,” said Githae.

Subsequently, the Kenyan government is mulling investing an additional $29 million in the company to increase its shareholding.

“Our voting rights in Telkom Kenya will be weakened, but we are working on whether it’s prudent to inject more cash in the firm to return our stake to 49%,” Githae told Business Daily.