[kictanet] Orange Now Wants GoK to Pay It US$385m, the Price it Paid for Telkom Kenya

[Andrea Bohnstedt]

Shem,

If anything, the fact that Telkom Kenya had accumulated a ridiculously
bloated workforce of 19,000 was an indication that government wasn't exactly
bending over backwards to manage this company properly. Generally, I think
the telecom sector is one that has done very well with private-sector
management - water, for example, or roads were a lot more difficult.

Privatisations can only be as good as the people privatising: If government
nudges the to-be-privatised company to someone well connected, but also
incapable with no finances, then it's not going to work out well. Even when
this isn't as clearcut, much depends on the terms set, the due diligence,
etc. It's a complex technical undertaking, and you can't divorce such
transactions from the overall governance environment.

I doubt that France Telecom will get the whole amount back - here's why:
News Analysis: Cash Back for France Telecom or Checking
Out?<http://www.ratio-magazine.com/201004132691/News-Analysis/News-Analysis-Cash-Back-for-France-Telecom-or-Checking-Out.html>

Andrea



On 1 May 2010 17:52, Shem Ochuodho <shemochuodho at yahoo.com> wrote:

>  Privatization of Telecom Services is Africa is litred with many failures,
> and sometimes, horror stories. In Tanzania, Celtel pulled out of TTCL after
> acquring a substantial stake (30%?). In Rwanda, Rwandatel had first to be
> re-possessed before finally being re-privatized - after initial investor
> failed to bring in the promised technology and capital. In Zambia, I
> understand (yet to confirm) that the 'strategic partner' even cannibalized
> vital elements of the core network already in place.
>
> I have always had reservation on privatization of strategic
> infrastructure state corporations, as I did with Telkom Kenya. While Ghana
> Telecom attracted US$ 900 million for 70% stake (itself a matter contested
> by the then opposition - now Govt), TKL attracted a paltry US$ 300 million
> for 51%! With simple Arithmetic, one should see why TKL ought to have
> fetched better - assuming they were at per with GhanaTel. Intuitively, TKL
> should have been a superioir enterprise! Sadly, now Orange even wants GoK to
> refund $385m; if that was to happen, essentially TKL would have been sold
> for nothing - yes, absolutely ZERO! Yet what did we see for it: the sending
> home of 19,000 strong workforce with 'death-shakes' (not hand-shakes)!
>
> What is going on here? Read further:-
> http://www.nation.co.ke/magazines/smartcompany/Lights%20dim%20on%20listing%20as%20Telkom%20misses%20targets%20/-/1226/906392/-/3urxv8/-/index.html
> .
>
> Warm rgrds,
> Shem
>
> Shem J. Ochuodho, MSc (Eng), PhD, LLD (Hon)
> Senior Advisor
> Ministry of Telecom & Postal Services
> Government of Southern Sudan (GoSS), Juba
> Kenya Community Abroad (KCA) 2007 Excellence Award Winner
> AfricaOnline 2005 Industry Pioneer Award Recipient
> Father of Internet in Kenya (CSK 2000)
> Cell: +249-955-021-040/+256-477-232025/+254-734-137371
> Skype: shem.ochuodho
>
>
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-- 
Andrea Bohnstedt
Publisher
+254 720 960 322
www.ratio-magazine.com
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