The Viettel Group’s withdrawal from its planned purchase of Orange’s 70 percent stake in Telkom Kenya has left the country’s telecom market in a state of disarray.
The Kenyan operation is the only remaining Orange telecom company in East Africa after the French company sold its Ugandan operations to Africell last week.
The move by Orange Telecom to exit the East African telecom market follows the decision by the Kenyan government to allow the sale of India’s yuMobile to Safaricom and Airtel, Orange’s big rivals in the region.
The Kenyan government said the decision by Vietnam-based Viettel to walk away from the deal with Orange leaves an opening for operators to enter the Kenyan market instead.
But the market appears to be in turmoil. “The fact that Orange and yuMobile are running away from the Kenyan market in less than a year paints a bad picture altogether about the market itself and the regulatory environment,” said Edith Mwale, telecom analyst at African Center for ICT Development.
Safaricom currently dominates the Kenyan telecom market with over 21 million subscribers, followed by Airtel, which has just over five million customers. Telkom Kenya only has 2.6 million subscribers.