France Telecom has been selected as the preferred bidder to acquire 51 percent of Telkom Kenya for USD 390 million. The transaction is planned to close before the end of the year. Telkom Kenya serves over 280 000 fixed line customers and will benefit from a new mobile licence. France Telecom has teamed up with Alcazar Capital, who subscribed to a 15 percent stake in the consortium. Logistics services provider Agility, one of Alcazar's shareholders, will provide expert knowledge of the Kenyan market.
This transaction fits with France Telecom's strategy of targeted development in fast growing markets, and marks a foray into anglophone Africa. With France Telecom, Telkom Kenya will develop convergent mobile, fixed and internet services. As mobile penetration currently stands at under 30 percent, the Kenyan mobile market offers a high growth potential. France Telecom will benefit from the existing infrastructure of Telkom Kenya to develop and launch its 2.5G network in the short term. The planned implementation of submarine cables in 2009 will give Telkom Kenya the means to offer affordable prices, versus satellite access only at present. France Telecom aims to market Telkom Kenya's services under the Orange brand.
