Corporate News
An Orange shop in Nairobi. PHOTO/FILE
NATION MEDIA GROUP
By Reuters
In Summary
- Without naming the other party, Rotich said he expected the transaction to be completed "very soon", adding that it could be completed before the end of year.
- "They essentially failed to innovate," she said, adding Orange's strategy of offering cheaper calls had helped it claw back some market share in recent years.
- 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.
France's Orange SA is in the final round of
negotiations with an unidentified party to sell its 70 percent stake in
Orange Kenya, Kenya's finance minister said.
Orange is the latest international operator to quit Kenya,
where Safaricom, part owned by Vodafone, has 67 percent of Kenya's 36
million mobile users.
"(Orange) wants to exit so they are selling their
70 percent," Finance Minister Henry Rotich, who oversees the
government's 30 percent shareholding in Orange Kenya, told Reuters.
"They are in final negotiations."
VERY SOON
Without naming the other party, Rotich said he
expected the transaction to be completed "very soon", adding that it
could be completed before the end of year.
Orange paid $390 million for its stake in 2007,
aiming to capitalise on what were fast growth rates in the sector. Its
plan was to make the firm, then known as Telkom Kenya, profitable and
then to take it public in five years.
Orange was not immediately available for a comment.
Faith Mwangi, a research analyst at Standard
Investment Bank, said Orange Kenya has struggled in recent years despite
enjoying a monopoly in fixed-line telephones.
THEY FAILED TO INNOVATE
"They essentially failed to innovate," she said,
adding Orange's strategy of offering cheaper calls had helped it claw
back some market share in recent years.
Orange increased its users to 4.0 million in the
quarter ended June from 3.7 million in the previous quarter, industry
regulator Communications Authority of Kenya said.
"They have been consistently gaining market share," Mwangi said.
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.
Kenya has two other telecom operators, India's
Bharti Airtel and Finserve, which is owned by one of the country's
biggest banks' Equity. India's Essar Telecoms sold its Kenyan business,
Yu, last year after it failed to make it profitable.
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