The Government of Kenya now owns 100 percent of Telkom Kenya after buying back 60 percent of the company shares from a UK-based private equity fund, Helios Investment Partners, for 6.09 billion shillings.
The acquisition of Telkom Kenya marks a rare return of a privatized company to State ownership. This also derails initial plans for the listing of Telkom Kenya at the Nairobi Stock Exchange (NSE) through an initial public offering (IPO).
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Telkom Kenya is currently valued at 10 billion shillings. Compared to Safaricom that is valued at 1 trillion shillings, Telkom Kenya’s value is just an iota of it. The takeover is also being seen as a move by the government to try and neutralize the power of Safaricom.
Telkom Kenya, which is Kenya’s third-biggest telecommunications company by users, has been losing subscribers in recent years. The operator’s mobile phone subscribers dropped from 4.23 million users in 2019 to 3.42 million in June, representing a 19.1 percent fall, in a period when its rivals—Airtel and Safaricom have gained customers.
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Helios is the latest international operator to quit Kenya, where Safaricom, part-owned by Vodacom and Vodafone, has 67 percent of 36 million mobile users.
There have been calls from part of the country’s leadership to have Safaricom and M-Pesa run as different entities. Some information has confirmed that Safaricom might be split from M-Pesa as soon as January 2023.