The Missing Piece in Telkom Kenya's Recovery Isn't Another Investor

The government may soon begin searching for a new Telkom Kenya strategic investor, according to people familiar with discussions around the company’s stalled ownership transition.

If that happens, Kenya will be attempting to resolve the same problem for the third time in four years. That should prompt a bigger question than who eventually buys the stake. It should force policymakers to ask why every ownership solution has collapsed before delivering the investment, stability and long-term strategy that Telkom Kenya urgently needs.

The temptation will be to frame the story as another chapter in the country’s telecom rivalry. That would miss the point. Telkom is no ordinary mobile operator. It sits at the centre of infrastructure that carries government communications, supports enterprise connectivity and links Kenya to global internet networks. The stakes extend well beyond subscriber numbers.

Another Ownership Plan Appears to Be Unravelling

Telkom’s ownership history has become a lesson in policy reversals.

The company was privatised in 2007 before passing through the hands of France’s Orange and later Helios Investment Partners. In 2022, the National Treasury spent Sh6.09 billion acquiring Helios’ 60 per cent stake through Article 223 of the Constitution, restoring Telkom to full State ownership.

The decision followed reviews by the National Treasury, endorsement by the National Security Council and Cabinet approval, with Article 223 invoked because the acquisition had not been budgeted for in advance. Parliament was later notified of the expenditure. What was intended to settle the ownership question instead became the subject of litigation, investigations and international arbitration that continue today.

Twelve months later, the new administration abandoned that approach.

On October 3, 2023, Cabinet rescinded the Helios buyout, approved Infrastructure Corporation of Africa (ICA) as the incoming majority shareholder and directed that Helios transfer its stake directly to the Emirati investor instead.

The transaction promised fresh capital, new management and a path out of uncertainty.

It has yet to reach the finish line.

People familiar with the process say completion deadlines have slipped repeatedly, leaving Telkom suspended between owners. A company caught in that position struggles to make long-term commitments. Banks become cautious, investment decisions are delayed and strategic planning gives way to preserving day-to-day operations.

If ICA ultimately walks away, Kenya will once again be looking for an investor before the previous plan has produced a lasting outcome.

From Privatisation to Policy Reversals

The ownership dispute has overshadowed a more fundamental issue.

Every year spent debating who should own Telkom has been another year in which competitors expanded networks, added customers and invested in new technology.

The company’s financial position has reflected that strain.

In 2023, Communications Authority officials disclosed that Telkom owed the regulator about Sh9.4 billion in outstanding obligations, prompting warnings that continued non-payment could trigger regulatory action. Around the same period, American Tower Corporation temporarily switched off a significant number of Telkom transmission sites during a dispute over unpaid lease fees. The disruption affected voice services, internet access and other customer communications in several parts of the country.

That episode was not an isolated setback. Earlier tower shutdowns over unpaid obligations had already demonstrated how financial distress could quickly spill into nationwide service interruptions. Each outage illustrated the practical consequences of prolonged uncertainty: customers lost service while management focused on keeping the business operational rather than investing in its future.

The regulator’s own measurements tell a similar story.

The Communications Authority’s latest Quality of Service assessment painted a bleak picture. Telkom recorded an overall compliance score of 52.76 per cent, well below the mandatory 80 per cent threshold. It failed to meet the regulator’s benchmark in all five regional clusters, produced the weakest drive-test performance among Kenya’s mobile operators and registered the lowest customer satisfaction rating.

Those figures do not prove that ownership uncertainty alone caused Telkom’s decline. They do provide independent evidence that years of delayed investment and strategic indecision have coincided with measurable deterioration in network performance.

Why Telkom Is More Than Kenya’s Third Mobile Operator

Looking only at market share understates Telkom’s importance.

The company manages the National Optical Fibre Backbone Infrastructure (NOFBI) on behalf of the Ministry of Information, Communications and the Digital Economy, connecting government offices, hospitals, schools and other public institutions across all 47 counties.

Its strategic role extends beyond Kenya’s borders.

Telkom holds equity interests in the TEAMS and LION2 submarine cable systems and serves as a landing partner for EASSy, DARE1 and PEACE, infrastructure that carries international internet traffic into and out of the country.

Government itself has repeatedly justified its involvement in Telkom on national security grounds. During the 2022 buyout, officials argued that the operator was critical because it supports communications used by the Office of the President, State House, the Government Data Centre, the Ministry of Interior, the General Service Unit, restricted Department of Defence networks and other sensitive public institutions.

That context makes the current ownership limbo harder to reconcile. If Telkom is considered essential enough to protect critical government communications and strategic digital infrastructure, leaving its ownership unresolved for years creates precisely the uncertainty successive administrations sought to avoid.

The Price of Ownership Uncertainty

Kenya’s telecommunications sector has continued to grow as smartphone adoption, mobile data consumption and digital services expand.

Telkom has not shared equally in that growth.

That contrast matters.

A growing market normally creates opportunities to modernise networks, invest in infrastructure and compete for new customers. Telkom has instead spent much of that period navigating ownership disputes, investigations, arbitration proceedings and repeated policy reversals.

The result is a business that has found itself waiting for decisions instead of making them.

Even so, the picture is not entirely bleak.

In 2025, Telkom announced a collaboration with Rakuten Symphony and Airspan Networks to explore Open RAN technology, AI-assisted network automation and next-generation mobile architecture. The initiative demonstrated that the company remains capable of attracting respected global technology partners despite its unresolved ownership position.

That contrast is striking. Telkom can still secure international technology collaborations, yet it has struggled to establish the ownership certainty needed to unlock sustained capital investment.

A Stronger Case for Splitting the Business

Perhaps the most practical proposal has received the least attention.

A 2018 McKinsey study commissioned by Telkom reportedly concluded that the company’s fibre infrastructure, wholesale operations and enterprise services remained commercially sound even as the retail mobile business struggled against larger rivals.

If that assessment still reflects today’s reality, continuing to treat Telkom as a single package makes little commercial sense.

Infrastructure assets and consumer mobile businesses attract different investors, carry different risk profiles and require different strategies.

Separating those businesses would allow each to be valued on its own merits rather than forcing profitable infrastructure assets to support a mobile operation that has steadily lost ground.

Any conversation about a new strategic investor should begin there.

What a Credible Investor Process Should Look Like

The problem has never been the idea of bringing in outside capital.

Telkom needs fresh investment, experienced management and a shareholder willing to make long-term commitments.

What Kenya cannot afford is another opaque transaction negotiated behind closed doors before the market has an opportunity to compete.

A transparent bidding process would give infrastructure funds, strategic telecom operators and institutional investors an equal opportunity to present proposals. Competition typically improves both valuation and accountability.

The alternative is another ownership reshuffle that postpones the underlying problems without resolving them.

The Future of a Strategic National Asset

If reports of another investor search prove accurate, the next decision will shape more than the future of one telecommunications company.

It will test whether Kenya has learned anything from two unsuccessful attempts to resolve Telkom’s ownership.

The wider Helios dispute also illustrates how prolonged legal battles can outlive the commercial transactions that created them. Investigations, court proceedings and international arbitration have continued years after the original buyout, reinforcing concerns about policy consistency and transactional certainty that matter to both domestic and foreign investors.

The country does not lack investors with the capital or expertise to rebuild the business. What it has lacked is a process capable of delivering certainty from start to finish.

Telkom’s future will not be secured by announcing another deal. It will depend on completing one—and on recognising that safeguarding a strategic national asset requires more than changing the name of the next shareholder.

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