Word from a well-placed insider: the government is about to go shopping, again, for a strategic investor to run and refinance Telkom Kenya. It is the height of irony that a multibillion-shilling national security asset is being left to bleed out in a regulatory and ownership wasteland.
Privatised in 2007, Telkom Kenya’s ownership has been a game of pass-the-parcel — from France’s Orange to the private equity group Helios, to full renationalisation, and finally to a little-known Emirati entity called Infrastructure Corporation of Africa (ICA).
The Cabinet announced ICA’s entry on October 3, 2023. Nearly three years later, the deal still hasn’t closed. Insiders say the milestones agreed with ICA keep being quietly pushed back, and that threats to cancel the deal for non-performance have gone nowhere.
The company is functionally uninvestable: it cannot raise capital, restructure its balance sheet, or commit to a strategy while its ownership hangs in the air.
The backstory matters. In the twilight of Uhuru Kenyatta’s administration, the Treasury invoked Article 223 of the Constitution to spend Sh6 billion — without parliamentary approval — buying out Helios’ 60 per cent stake. By the time William Ruto took office, Telkom was 100 per cent taxpayer-owned. We paid for it.
Then, on October 3, 2023, the new Cabinet reversed course: it rescinded the Helios buyout, picked ICA as the incoming majority shareholder, and directed the government to work with Helios to transfer its stake directly to ICA. That handover has since stalled completely.
The EACC’s corruption case over the original transaction has gone nowhere either— the Director of Public Prosecutions found the evidence insufficient, twice. Whatever the courts eventually decide, the pattern speaks for itself: politicians got their headlines, investigators filed their reports, lawyers billed their fees, and the company kept bleeding.
This is not merely a third-place mobile operator losing ground to Safaricom and Airtel — that framing understates the stakes. Telkom Kenya manages the National Optical Fibre Backbone Infrastructure (NOFBI) on behalf of the Ministry of ICT, the terrestrial network linking government offices, hospitals, and public institutions across all 47 counties. It also holds Kenya’s stakes in the undersea cables connecting the country to the world: roughly 22.5 per cent of TEAMS, 10 per cent of LION2, and landing-partner status on EASSy, DARE1 and PEACE.
Leaving the custodian of that infrastructure in limbo — while American Tower Corporation (ATC) periodically switches off transmission masts over billions in unpaid lease debt — is not just a governance failure.
It’s a national security exposure dressed up as a shareholder dispute, made more absurd by a government simultaneously touting a National Broadband Strategy promising another 100,000 km of fibre by 2030, even as the custodian of its existing backbone teeters on insolvency.
If ICA is indeed on its way out, Kenya is about to run this experiment a third time. The problem was never that the government wants a new investor — Telkom genuinely needs fresh capital and competent management.
Deep-pocketed players
But without a rigorous, competitive bidding process to attract deep-pocketed players, the likely outcome isn’t a strategic investor at all. It’s another set of well-connected intermediaries extracting fees from a shrinking company, while the vultures circling Telkom’s genuinely profitable data and infrastructure business quietly wait their turn.
There’s a structural fix that keeps being discussed and never acted upon. A 2018 McKinsey study commissioned by Telkom found that its data and fibre infrastructure business — the cable stakes, the NOFBI contract, enterprise and wholesale data — was fundamentally sound and profitable, even as the mobile business was being structurally outcompeted.
If that finding still holds, the logic is obvious: stop rescuing Telkom as one bundled entity. Separate the profitable infrastructure business from the loss-making mobile arm so each can be run, valued, and — if necessary — recapitalised or sold on its own terms.
A profitable fibre operation shouldn’t have to subsidise a mobile business that has already lost the subscriber war. Any serious investor conversation should start from that separation, not with auctioning off the whole tangled company as one unit — a structure that favours opaque, insider-brokered deals over clean, competitive ones.
In hindsight, the government’s 2020 refusal to approve a Telkom–Airtel merger looks like the moment this mess became inevitable. Kenya has since lurched from one improvised ownership fix to the next — nationalisation, then an Emirati sale that still hasn’t closed, and now, apparently, an unwinding of that sale too. Kenya has run this experiment badly twice.
A third attempt conducted in the same way won’t save Telkom. It will simply hand the profitable half of a national asset to whoever has the best political connections, rather than the most capital.
