Mergers, Acquisitions and Financial Results

The government has not found a buyer for Telkom Kenya. Transport and Communications Minister John Michuki said last week. A wrong impression had been created by the media that the sale of the State corporation had been finalised.

Mr Michuki said the government was still looking for a suitable buyer, and was privatising some of the firm’s core functions. "This is a short-term strategy to improve its operational efficiency in readiness for sale to a strategic investor in the long run," he said.

Last week, press reports quoted the minister as telling the African Investment Forum in Johannesburg, South Africa, that the sale had been finalised.

The sale was first put off in December 2000, after the highest bidder, Mount Kenya Consortium, failed to raise its US$305 million bid. Mount Kenya also promised to invest US$500 million in updating Telkom’s equipment. Yesterday, Mr Michuki said the government would license a second national network operator, ending the Telkom monopoly.

"We do not want to move from one monopoly to another. We have learnt from the chaos and negligence we inherited from the previous system," he said.

The government would appoint four Internet Service Providers (ISPs) to provide increased competition (to Jambonet), while plans were under way to license another mobile telephone provider to compete with Safaricom and KenCell which have 1.4 million customers between them.

To attract foreign investment, we must reduce the cost of doing business," he said.

The Nation