Leave options to take Telkom Kenya private open – Business Daily
Telkom Kenya CEO Mugo Kibati. PHOTO | SILA KIPLAGAT | NMG
The government says it bought back Telkom Kenya out of fears that the UK-based private equity fund, Helios, would sell to an investor that does not share in the same vision of turning around the telco’s fortunes.
The rare deal that returned the privatised company to State ownership saw the Treasury spend Sh6.09 billion without Parliament’s approval on account of urgency after “Helios threatened to quit”.
Treasury sources reckon that Helios lost interest in Telkom after its merger with Airtel Kenya collapsed.
France’s Orange bought a majority share in Telkom Kenya when it was privatised in 2007 but then sold its stake to London-based Helios in 2015 for undisclosed fees.
Be that as it may, it is well known that the government has struggled to run any profitmaking enterprise, leading to the proliferation of inefficient, loss-making and debt-plagued State corporations.
The government also needs money to plug budget deficits, which have caused excessive reliance on debts to meet its obligations. It cannot, therefore, be spending money to buy struggling companies.
Telkom, Kenya’s third-biggest telecommunications company by users, has been losing subscribers in recent years.
While the State buyout will derail the plans to list Telkom on the Nairobi Security Exchange, we hope the government will expedite the telco’s return to the private sector, either through the bourse or privatisation.
The government should focus on its role of providing an enabling environment for enterprise, such as easing regulatory bureaucracy.