French incumbent Orange has concluded that it has lost control over Telkom Kenya, in which it holds a 70% stake.
Orange said in its earnings report for 2014 that it had intended to implement certain solutions that year in response to Telkom Kenya’s…
French incumbent Orange has concluded that it has lost control over Telkom Kenya, in which it holds a 70% stake.
Orange said in its earnings report for 2014 that it had intended to implement certain solutions that year in response to Telkom Kenya’s financial difficulties.
However, the Paris-based telco added that it decided during the fourth quarter that continuing disagreements with the Kenyan government meant it was contractually unable to implement the planned solutions without the government’s consent.
“This led the group to conclude that it had lost control over the entity,” the company said.
The government of Kenya owns the remaining 30% in Telkom Kenya.
A spokesperson for Orange explained that the company “considers that it is unable, as a shareholder, to take decisions and implement by itself certain solutions allowing it to address Telkom Kenya’s financial difficulties”.
Practically, he said this means Telkom Kenya is no longer integrated in Orange’s consolidated accounts and is only accounted under the equity method.
Orange launched a strategic review into its holdings in Telkom Kenya and Orange Uganda in 2014 and closed the sale of the latter to Africell in November that year.
That same month, talks to sell its stake in Telkom Kenya to Vietnam’s Viettel collapsed. Viettel reportedly pulled out because it could not come to an agreement with the government on a number of assurances.
According to figures from the Kenyan government, Telkom Kenya has an 8% market share of the mobile market. The two largest players are Vodafone’s Safaricom and Airtel Kenya.
