French telecom group Orange has said it has signed a deal with an African private equity firm for the sale of its 70 per cent stake in Telkom Kenya.
Organge has signed a binding agreement Helios Investment Partners for the sale for an undisclosed amount, a statement issued in Nairobi from Orange said.
The finalization of the transaction remains subject to approval from the relevant authorities, it said.
“This signature reflects Orange’s constant focus on optimizing its portfolio of assets.
The Africa and Middle East region is a strategic priority for the Group,” it said.
Telkom Kenya is the country’s incumbent fixed-line operator and is the third player in the mobile market.
The company, which operates a high-quality mobile data network, had 4 million mobile customers at the end of June, according to figures published by Communications Authority of Kenya.
Orange paid 390 million dollars for 70 per cent of Telkom’s stake in 2007.
In 2014, an attempt by the French company to sell its majority shareholding in Telkom Kenya to Vietnamese telecoms firm Viettel fell through.
Viettel reportedly pulled out of the deal after the Kenyan government, which owns the remaining 30 per cent of Telkom, rejected a number of its conditions for the deal.
This time, if relevant authorities approved the deal, Orange will be the latest international operator to quit Kenya, where Safaricom, partly owned by Britain’s Vodafone, has the majority of subscribers.
One of Safaricom’s main advantages has been the development of its pioneering M-Pesa mobile money system, which allows users of even the most basic mobile phones to make payments.
Rival offerings have yet to break Safaricom’s dominance.
Helios Investment Partners is expected to share its business proposal, complete with the strategy, with the Kenyan government.