News

The government is considering bailing out Telkom Kenya


Telkom Kenya has been hitting the headlines over the last couple of months following its full acquisition by the government last year. Treasury acquired a 60% stake in the telco from UK-based private equity fund, Helios Investment Partners, for Ksh. 6.09 billion, making the company fully State-owned.

Controversy, however, surrounded the purchase after it was revealed that it was done without the approval of parliament. This also happened at the time when the telco was going through financial turbulence owing to its huge Ksh.9.4 billion debt burden owed to the Communication Authority of Kenya (CA).

At some point, CA CEO Ezra Chiloba even threatened to withdraw Telkom Kenya’s license unless the debt is paid. 

Chiloba, while appearing before a joint committee of Parliament probing the Telkom Kenya buyout in March added that some service providers like the American Tower which leases towers to Telkom Kenya to operate could also pull out their services soon.

Information, Communication and the Digital Economy Cabinet Secretary Eliud Owalo now says the government is considering bailing out Telkom Kenya.

The CS said the government was also looking for a strategic investor to bail out the telco to reduce the risk of spying of critical government information. 

“The government is concerned about the security of its communications infrastructure,” Owalo said. “We believe that by owning a majority stake in Telkom Kenya, we can better protect our national security.”

Telkom Kenya provides communications services to critical government including the Office of the President, the State House, the government data centre, the Ministry of Interior, the General Service Unit, the Department of Defence’s restricted communications networks as well as other critical State functions.

Recently, the company experienced a wide network outage affecting thousands of its users. Although it did not come out to give the reasons behind the outage, reports indicated that it was due to its towers being shut down. According to a report by National Broadcaster KBC, American Towers Corporation (ATC) switched off half of its masts spread across the country over a Ksh 200 million pending bill, making it difficult for subscribers in the affected regions to call, browse the internet and send money.

In a statement on the outage, CEO Mugo Kibati, said ”Telkom Kenya and its stakeholders are in the midst of reviewing the short to long-term strategic imperatives that will improve and guarantee services to our esteemed customers.”

Follow us on TelegramTwitter, and Facebook, or subscribe to our weekly newsletter to ensure you don’t miss out on any future updates. Send tips to editor@techtrendske.co.ke

Facebook Comments

[TechTrends Podcast] Connectivity in Africa ft Africa Data Centres MD Dan Kwach

Nixon Kanali

Tech journalist based in Nairobi. I track and report on tech and African startups. Founder and Editor of TechTrends Media. Nixon is also the East African tech editor for Africa Business Communities. Send tips to nkanali@techtrendske.co.ke.

Have anything to add to this article? Leave us a comment below

Back to top button