Talks between Orange and Vietnam’s Viettel for a sale of the French group’s 70% stake in Telkom Kenya have collapsed, according to Kenya’s treasury secretary Henry Rotich.
The government, which owns the remaining 30%, now expects Orange to find…
Talks between Orange and Vietnam’s Viettel for a sale of the French group’s 70% stake in Telkom Kenya have collapsed, according to Kenya’s treasury secretary Henry Rotich.
The government, which owns the remaining 30%, now expects Orange to find another buyer, Rotich was quoted as saying by local newspaper Business Daily.
Orange launched a strategic review into its holdings in Telkom Kenya and Orange Uganda earlier this year. On 12 November, it closed the sale of its Ugandan unit to Africell.
Viettel was named as one of three parties interested in Orange’s Telkom Kenya stake in a local press report from June. Nigerian group Megatech Engineering was rumoured to be the Vietnamese telco’s chief competitor while an unnamed British consortium was also mentioned.
Today’s report suggests that Viettel pulled out after it could not come to an agreement with the government on a number of assurances.
The Hanoi-based telco had asked for all of Telkom Kenya’s licences to be extended by 15 years and to gain a further 10% stake in the fixed-line and mobile operator.
Neither Orange nor Viettel responded to requests for comment before the press deadline.
ICT secretary Fred Matiang’i was cited saying that some of Viettel’s conditions were unrealistic and that investors would have to abide by existing rules. He added that a local IT firm and some Kenyans in the diaspora were also interested.
Kenya is reportedly putting together a team of officials from the Attorney General’s office, the Treasury and the ICT ministry to advise on the next steps should Orange fail to come up with a new exit plan.
The French telco’s strategic review comes as Telkom Kenya remains in the red in the face of strong competition in the mobile sector.
According to figures from the Kenyan government, Telkom Kenya has an 8% market share of the mobile market, while Vodafone’s Safaricom has 68%.
The market leader and number two Airtel recently received approval to split the assets of Yu Mobile, the country’s third-largest player, between themselves.
