Telkom Kenya will continue to market services under the Orange brand for at least another 18 months according to local press reports, even though the France-based Orange group has now completed the sale of its entire 70 per cent stake in the operator.
Helios Investment Partners acquired 60 per cent of Telkom Kenya via Jamhuri Holdings, while the Kenyan government took a further 10 per cent stake and increased its overall share to 40 per cent.
According to The Star, the government decided to take up a KES12 billion (€105 million/$118.5 million) loan owed to Orange East Africa by Telkom Kenya. Investment secretary Esther Koimett said this would enable the state to better defend its position in the company should there be another sale.
Standard Digital added that Koimett described the debt as "actually an asset", noting that Telkom Kenya would pay the debt if and when it starts generating profits.
The online news service also noted that Telkom Kenya would continue using the Orange brand for at least 18 months under the terms of an agreement reached "after intense negotiations."
Orange was unable to comment on the brand reports, but a company spokesperson noted that it's fairly standard practice for brand licensing agreements to remain in place for a period of time to allow the new teams to decide on their next steps. Helios Investment Partners was also unable to comment on the brand-licensing arrangement and Telkom Kenya did not respond to a request for confirmation before publication.
The negotiations between Orange and Helios have been kept very private, with few details including the sales price revealed by either side.
The Star noted that Telkom Kenya has struggled to gain traction since the government sold off a majority stake in 2007. According to data provided by the Communications Authority of Kenya, the company had 4.6 million subscribers as of the end of 2015, equating to 12.4 per cent of the market. Market leader Safaricom had a 64.7 per cent share of the market and 24.4 million subscribers, while Airtel controlled 19.2 per cent with 7.2 million subscribers. New entrant Equitel had 3.7 per cent share of the market with 1.4 million subscribers.
For Orange, the exit from Kenya by no means reflects its general stance on Africa: the company continues to build up its assets in other countries across the region. Indeed, the operator is believed to be mulling the acquisition of further operations owned by Millicom International Cellular in Africa and is also said to be looking for new opportunities in East Africa after the sale of its Kenya business.
For more:
- see this Standard Digital article
- see this The Star article
- see the Orange announcement
- see the market report from the Communications Authority of Kenya
- see the Helios Investment Partners announcement
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