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Orange exit: where to from here for Telkom Kenya?

Orange exit: where to from here for Telkom Kenya?

The decision by French telecommunications firm Orange to sell its 70% stake in Telkom Kenya to Helios Investment Partners, effectively signalling its exit from Kenya, presents an opportunity for local competitors to secure market share away from Telkom Kenya.

This is according to Dobek Pater, Managing Director of Africa Analysis, who points out that much depends on the approach taken by Helios Investment Partners towards its purchase because this will, to a degree, dictate how Telkom Kenya progresses.

"In the case of Multi-Links in Nigeria, for instance, Helios took out the tower and some of the fibre assets (connecting some of the towers to the national network – fibre backhaul from the towers) and on-sold the rest, if I remember correctly. It may want to do something similar with TE, e.g., retain some of the assets key to its tower business and sell the operations to a third party," said Pater.

However, as Pater also explains, the Kenyan government holds a 30% stake in the telco and may have more power at board level – which means it could have a greater say in what happens to the company.

"Helios itself is not an operator, therefore, it will probably need to bring in a third party or put together a team to manage TE. Unless this function reverts to the government and Helios remains purely an investor," Pater continues.

While he feels the move is not necessarily a game-changer for the market, Pater predicts that direct competitors, including the likes of Liquid Telecom, MTN Business, IS, Airtel or even Safaricom, could capitalise and win market share.

The French telecommunication firm has initiated several recent changes to its management structure overseeing operations in Africa.

In October Orange announced the appointment of Bruno Mettling as deputy CEO in charge of operations in Africa and the Middle East. The company said the move was in line with its five-year operational plan which it has called Essentials2020.

In September this year the company also named executives to lead its three subsidiaries in Africa, including Guinea, Mali and Senegal.

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