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Business of Tech

Telkom Kenya now 100% owned by Kenyan government

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The Kenyan government now owns 100% of telecoms operator, Telkom Kenya, upping its 40% shareholding by buying the remaining 60% stake owned by British investment firm Helios Investment Partners.

The East African country's government is reportedly paying 6.09 billion Kenyan Shillings (US$50.4 million) for the 60% stake and Kenyan media publications are reporting that the government found a loophole to spend the money without the approval of Parliament.

"Already, the Treasury has invoked Article 223 of the Constitution that allows them to spend money without the approval of Parliament. They have approved the withdrawal of KES45.67 billion ($377 million) out of which KES23 billion ($190 million) has been paid out," Kenya's Parliamentary Budget Office acting director Martin Masinde told Pulse Live.

Jamhuri Holdings Limited (JHL), a company owned 100% by Helios Investors, originally acquired a majority stake in Telkom Kenya from France Telecom back in June 2016, through its local subsidiary Orange.

That transaction also included an increase in the shareholding of the Kenyan government in Telkom from 30% to 40%.

A treasury official told Business Daily that the Kenyan government bought the remaining shares after Helios threatened to quit.

"We bought the shares because the government was afraid Helios was going to sell to an investor that did [not] share the same vision with us in the turnaround of Telkom Kenya," the official was quoted saying.

Want to know more about telco financials, regulation and deals in Africa? Check out our dedicated Business of Tech content channel here on Connecting Africa.

The government buyout comes after a failed merger between Telkom Kenya and Airtel back in 2020 which would have seen the telcos joining forces to take on dominant operator Safaricom.

After walking away from the deal Telkom Kenya has remained firmly in third place when it comes to Kenya's mobile users, with about 4.4 million mobile customers in the second quarter of 2022, stats from market research company Omdia show.

Telkom is far behind market leader Safaricom's almost 43 million subscribers and second place Airtel Kenya's 16.4 million users but does come out ahead of Jamii Telecommunications which only has 275,000 subscribers.

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*Top image source: Image by Allexxandar on Freepik

— Matshepo Sehloho, Associate Editor, Connecting Africa

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