How birth of M-Pesa sealed Orange Telkom’s fate
23 June 2017
Helios Investment Partners, the biggest stock holders in Telkom Kenya, have rolled up their sleeves and hope their recently unveiled turn-around plan will awaken the sleeping giant. The London-headquartered private equity firm that bought a controlling stake in the telco, says it believes it can conquer the Kenyan telecommunications market.
The company that was founded by Nigerian-born duo Babatunde Soyoye and Tope Lawani has been camping at Telkom Plaza on Ralph Bunche Road for about a year now, and on June 6 unveiled to the public what they said would disrupt the telecommunications industry.
They aim to increase the number of customers, get a return on investment and possibly eat into Safaricom’s market share. The latter is the market leader and the most profitable listed firm in eastern Africa.
In the short period they have been around, the new managers at Telkom Kenya have been doing some house cleaning after French firm Orange left the telco in a shaky financial position.
First, they had to weed out inactive subscribers, resulting in the number of customers going down by about half to 2.9 million as of December 2016, according to data from Communications Authority of Kenya (CA). This is against 5.2 million subscribers reported earlier in the year before Helios took over the reins.
Orange, which acquired Telkom Kenya in December 2007, was reporting the number of subscribers in a model contrary to guidelines issued by CA. The regulator obligates operators to keep a 90-day record, which helps give the true nature of service reach by removing inactive customers.
Second, the new owners said they had pumped in Sh5 billion in infrastructure upgrade, doubling the capacity of Telkom’s 3G network and rolling out a 4G network in nine towns. The firm is preparing itself for a vicious battle to woo data customers, a key growth area for the industry.