Mergers, Acquisitions and Financial Results

Outgoing Telkom Kenya Managing Director John Waweru has predicted June 2006 deadline as the date when the giant state corporation would be privatised. "It can't be in six-months. If we work hard, it will be within a year," said Waweru while answering questions from journalists. Waweru, who was handing over to the incoming MD Sammy Kirui was, however, non-committal on the method the Government would use to offload Telkom Kenya shares.

"Privatisation is not debatable. The only question is how and who partners the Government. It can either be through an Initial Public Offer (IPO) on the Nairobi Stock Exchange or partnership with an investor," he said.

Two months ago, the State hired a consultant to prepare Telkom Kenya for privatisation.

The report will be submitted to the Telkom board this month, to enable the Government release a divestiture timetable. The corporation says it will sack 12,000 employees to save Sh400 million in annual salary to enable the corporation carry out its privatisation strategy. The Government has consistently pushed forward Telkom's privatisation. However, it first wants to modernise the corporation so as to fetch higher returns from the sale.

"The corporation is 98 per cent digitalised. There are even new products and services that will be launched in the next 90 days to enhance Telkom Kenya's position in the marketplace," said Waweru.

Kirui, who replaced Waweru, said his interim programme is to continue with the current reform plan, including laying out a Sh5 billion terrestrial fibre optic between Nairobi and Mombasa, activating Telkom's provision of Internet services and fixed wireless service.

Kirui said he plans to redefine the role of Telkom Kenya in a competitive market in the long run.

"I will be taking stock of reality and define the role of Telkom Kenya in terms of its present business model and which is ideal for the corporation," Kirui said.

Yesterday, Waweru said the corporation had lost Sh400 million to vandalism in the 2003/04 seasons.

The East African Standard