Telkom sale expected in September

26 Mar 2007

Bids will be invited later this year for the part-privatisation of Telkom Kenya, with the winner set to be announced on 25 September BalancingAct-Africa reports. Telkom currently holds the country’s sole nationwide fixed line licence, with the award of a second national operator (SNO) concession recently cancelled. It claimed under 280,000 fixed line customers at the end of 2006, with the total falling over the past few years as consumers abandon the country’s struggling wireline networks for more reliable cellular services. The company’s Preliminary Information Memorandum which will be sent to prospective bidders says modernisation is under way, however; a new USD22.6 million CDMA2000-based wireless local loop platform is being planned, while IP-based fibre and microwave links are currently being deployed in all major commercial centres.

The Kenyan government plans to take control of Telkom’s 60% interest in the country’s leading cellular operator, Safaricom, leaving Telkom free to enter the mobile market under its own steam once a new investor is found. The telco saw EBITDA fall from USD52 million in 2003 to a loss of USD1 million in 2005, although preliminary figures suggest that a positive EBITDA figure of around USD7 million can be expected for 2006. It is now thought that 51% of Telkom’s shares will be offered to a strategic investor; the government had been expected to offer a 26% stake, with 34% to be sold on the Nairobi Stock Exchange, but the public sale is now unlikely to go ahead in the near term.

Kenya, Telkom Kenya