Mergers, Acquisitions and Financial Results

The Government is sourcing for funds to finance retrenchment exercise at the Telkom Kenya, Information Minister Raphael Tuju said last week. He gave no clues as to where the money would come from.

Tuju said the Chinese government had expressed interest to assist Telkom Kenya undertake local connection of wireless telephone service to subscribers to boost the company's revenue base ahead of the proposed retrenchment.

Tuju, who was fielding questions from journalists at his office, said the company had a bloated staff of over 17,000, and the revenue collected on monthly basis could not sustain the wage bill.

He said Sh25 billion is required to turnaround the corporation.

'A report on Telkom touched on a lot of things but the most important is the restructuring that is necessary for it to become much more viable business because at the moment it is loss making,' said the minister.

The minister said the Government was putting systems in place to boost the company's performance ahead of restructuring exercise.

Tuju said over 100,000 subscribers had applied to be connected, but were kept in the waiting list as Telkom could not cope with the demand.

'Right now if you apply for a line, it would take you months or even years to get one. We have to make a paradigm shift in the way we do business at Telkom,' said the minister.

He said the Government was working on a programme to assist Telkom Kenya adopt new technology to enable it connect subscribers with a wireless telephone.

'My recent trip with the President to China has put all this matter into perspective. The CDMA technology should enable as many people as possible to be connected without having to physically connect them with copper wires, so to speak,' he said.

He said the proposed project would boost revenue base for Telkom Kenya and make the company viable institution.

He said the Government was keen on assisting Telkom carry out the restructuring exercise with a human face by offering golden handshake packages.

He said the proposed exercise will be staggered to make it manageable, adding the Government was talking to various to secure financing for the exercise.

Tuju said Telkom Kenya turnaround required Sh25 billion that must be raised by the Government.

The East African Standard