[kictanet] Is Telkom Kenya insolvent and should the Government bail it out? Again?

Tue Jun 4 20:24:27 EAT 2013

Why hasn't the government divested from Safaricom, in that case? You need
to delink the argument from the profit motive. If the government has no
business doing business (which is a view I strongly hold), then government
should relinquish it's shareholding in everything from cement, banking,
airline travel, petroleum etc. We should not be saying government has no
business doing business only when the companies are making losses...

I'll explain my view - WPP - the worlds largest advertiser. WPP actually
stands for Wire Plastic & Products. Martin Sorell bought it primarily
because it's asset base was larger than it's book value (the move allowed
the company to buy advertising agencies with the liquidated assets - given
that the company was worth less than the assets it was also easy to
fundraise)- which I suspect is the case with Telkom Kenya. This move that
Orange is pulling, I suspect capitalises it long enough to reduce
government shareholding (precisely because of citizen pressure with regards
to efficient use of taxes). The value keeps dropping with every capital
injection (the "crisis") finally allowing Orange to have the entire company
(why would Orange keep increasing their shareholding if it's a loss making
enterprise without hope? Why would they keep pumping cash into the company
if it's derelict?) . This is mere speculation on my part.

Telkom Kenya initially owned shares in Safaricom - at the time, Safaricom
was worth more than Telkom Kenya - a ridiculous situation. A clever
investor (had Telkom been a publicly traded company) would simply have
bought Telkom to gain a majority share of Safaricom at a bargain...

On Tue, Jun 4, 2013 at 8:09 PM, Ali Hussein <ali at hussein.me.ke> wrote:

> I disagree..there are definitely assets within Telkom Kenya. The question
> is whether those assets are pertinent to the success of a Telco. Definitely
> not all of them are.
>
> May be the Government should cut its losses and divest fully from Telkom
> Kenya. Certainly it doesn't make sense anymore for Governments to own a
> piece of a Telco. If it wants to continue to maintain its Big Brother role
> in the name of National Security it doesn't need to own a Telco. Just ask
> Google and AT&T and other Telcos in the US.
>
>
> Ali Hussein
> CEO | 3mice interactive media Ltd
> Principal | Telemedia Africa Ltd
>
> +254 713 601113
>
> "The future belongs to him who knows how to wait." - Russian Proverb
>
> Sent from my iPad
>
> On Jun 4, 2013, at 7:04 PM, Barrack Otieno <otieno.barrack at gmail.com>
> wrote:
>
> You nailed it Phares, exactly!
>
>
> On Tue, Jun 4, 2013 at 6:47 PM, Phares Kariuki <pkariuki at gmail.com> wrote:
>
>> Not so simple…
>>
>> Telkom Kenya (at some point between 2006/2007), was East Africa's largest
>> company by assets…
>>
>> Even if Orange was shortchanged by 300M USD, there are still significant
>> real estate holdings (all the telephone exchanges - the land they have  etc
>> etc).
>>
>> These are assets which were bought with public cash. It's a tricky
>> situation where the government either throws good money after what is
>> potentially a bad investment or the government lets Telkom die (with a
>> significant investment of our tax money)… Simply letting the organization
>> go, might cost the country more in terms of asset loss…
>>
>>
>> On Tuesday, June 4, 2013 at 9:54 AM, Adam Nelson wrote:
>>
>> IMHO, the easy solution is for the government to divest its share and let
>> the market take care of the rest.  Landlines and fixed data connections no
>> longer require government support and if the company fails, it's not a big
>> problem since Telkom is not a critical resource (unlike KPLC).
>>
>> ---
>> OpenStack for Africa: http://signup.kili.io
>> Musings: https://twitter.com/varud
>> About Adam: https://www.linkedin.com/in/adamcnelson
>>
>>
>> On Tue, Jun 4, 2013 at 8:57 AM, Barrack Otieno <otieno.barrack at gmail.com>wrote:
>>
>> Ali,
>>
>> I think Telkoms problems are deliberate, there is no way such an
>> institution can be crippled without a deliberate move and sheer ignorance
>> this is where we call for accountability, there must be someone smiling
>> somewhere over its misfortunes. Sometimes Business is common sense, you
>> reap what you sow, we need to know who was the sower in this case?, what
>> was sowed and who reaped where because public money was pumped into this
>> organization. We also need to have a public audit of its asset base and
>> what really transpired when the organization was downsizing.
>>
>> Best Regards
>>
>>
>> On Tue, Jun 4, 2013 at 8:29 AM, Ali Hussein <ali at hussein.me.ke> wrote:
>>
>> Listers
>>
>> The trials and tribulations of Telkom Kenya are a sad chapter in the
>> country's road towards actualization of Vision 2030.
>>
>> What actually ails Telkom Kenya?
>>
>> What is the real reason behind its inability to leverage on its legacy
>> systems to re-invent its business model?
>>
>> Is one of the problems the fact that the Government shackled it with a
>> nondescript, pedestrian workforce steeped in Moi era  non-performance
>> ethos?
>>
>> Are there forces beyond the powers of the Management of Telkom Kenya
>> (like Mpesa maybe?) that has made it so irrelevant in the scheme of things?
>>
>> In my humble opinion this has been a failed exercise in privatization.
>>
>> What did we do right in the Government divestiture of Safaricom in
>> comparison to Telkom Kenya?
>>
>>
>> http://www.nation.co.ke/News/Taxpayers-face-Sh6bn-bill-in-foul-share-deal/-/1056/1870526/-/item/0/-/ign3ff/-/index.htmlu
>>
>> Ali Hussein
>> CEO | 3mice interactive media Ltd
>> Principal | Telemedia Africa Ltd
>>
>> +254 713 601113
>>
>> "The future belongs to him who knows how to wait." - Russian Proverb
>>
>> Sent from my iPad
>>
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>> --
>> Barrack O. Otieno
>> +254721325277
>> +254-20-2498789
>> Skype: barrack.otieno
>> http://www.otienobarrack.me.ke/
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>> sector in support of the national aim of ICT enabled growth and development.
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>> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
>> for people and institutions interested and involved in ICT policy and
>> regulation. The network aims to act as a catalyst for reform in the ICT
>> sector in support of the national aim of ICT enabled growth and development.
>>
>> KICTANetiquette : Adhere to the same standards of acceptable behaviors
>> online that you follow in real life: respect people's times and bandwidth,
>> share knowledge, don't flame or abuse or personalize, respect privacy, do
>> not spam, do not market your wares or qualifications.
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>>
>> --
>> Regards,
>>
>> Phares Kariuki
>>
>> | T: +254 720 406 093 | E: pkariuki at gmail.com | Twitter: kaboro | Skype:
>> kariukiphares | B: http://www.kaboro.com/ |
>>
>>
>>
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>> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
>> for people and institutions interested and involved in ICT policy and
>> regulation. The network aims to act as a catalyst for reform in the ICT
>> sector in support of the national aim of ICT enabled growth and development.
>>
>> KICTANetiquette : Adhere to the same standards of acceptable behaviors
>> online that you follow in real life: respect people's times and bandwidth,
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>
>
>
> --
> Barrack O. Otieno
> +254721325277
> +254-20-2498789
> Skype: barrack.otieno
> http://www.otienobarrack.me.ke/
>
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>
> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
> for people and institutions interested and involved in ICT policy and
> regulation. The network aims to act as a catalyst for reform in the ICT
> sector in support of the national aim of ICT enabled growth and development.
>
> KICTANetiquette : Adhere to the same standards of acceptable behaviors
> online that you follow in real life: respect people's times and bandwidth,
> share knowledge, don't flame or abuse or personalize, respect privacy, do
> not spam, do not market your wares or qualifications.
>
>
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>
> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
> for people and institutions interested and involved in ICT policy and
> regulation. The network aims to act as a catalyst for reform in the ICT
> sector in support of the national aim of ICT enabled growth and development.
>
> KICTANetiquette : Adhere to the same standards of acceptable behaviors
> online that you follow in real life: respect people's times and bandwidth,
> share knowledge, don't flame or abuse or personalize, respect privacy, do
> not spam, do not market your wares or qualifications.
>

-- 
Warm Regards,

Phares Kariuki

| *T*: +254 720 406 093 | *E*: pkariuki at gmail.com | *Twitter*: kaboro |*Skype
*: kariukiphares | *B*: http://www.kaboro.com/ |
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