Orange Kenya Acquisition: Why Helios over Viettel and What next

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Last week, France Telcom Orange which owns Telkom Kenya announced the sale of its 70% stake in the telco to  Helios Investment Partners. Helios is a former shareholder in Equity Bank and an active investor in Wananchi Group that owns Zuku. Helios does not have any active stakes in any telco across its investment portfolio which generated questions as to why Vietnamese telco Viettel that also placed bids, was not chosen for the deal. Techweez has reliably learnt that the government, which owns 30% of Telkom Kenya had its reservation over the ownership of Viettel as its a wholly state-owned company that is operated by the Vietnamese Ministry of Defence.

According to our Sources, Helios will continue using the Orange Kenya brand for the next 18 months as it deliberates on the new brand to carry locally. In this period, everything is expected to continue operating normally pending conclusion of the deal with existing products pushed as before.  Orange is expected to continue executing ongoing plans to improve its mobile network besides revamping its fixed network offering. Streamlining operations previously initiated to increase margins will continue to take place at the organization. As expected, Helios will bring in a technical partner to help it scale operations. Helios is also expected to bring in a new  leadership team to run operations.

The deal is subject to regulatory approval with the Communications Authority of Kenya saying the telco must pay a Kshs. 1.5 billion debt to get approval for the sale. The debt comprises accrued frequency and operating fees for 2014 and 2015.

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