[kictanet] Fate of NOFBI - Investors attracted by Telkom Kenya’s Sh13bn real estate

Tue Sep 29 11:31:20 EAT 2015

Mwendwa

During the EAIGF I boldly declared (Brian Longwe’s words, not mine! :-) ) that the Universal Access Fund in all East African countries are at best Moribund. I’m yet to be proven wrong.

This is a great opportunity to revive them.. The NOFBI project will otherwise be a white elephant. More’s the pity..

Thanks & Regards

Ali Hussein
ali at hussein.me.ke

+254 713 601113
Twitter: @AliHKassim
Skype: Abu-Jomo
LinkedIn: http//ke.linkedin.com/in/alihkassim
Blog: www.alyhussein.com

> On Sep 29, 2015, at 11:22 AM, Mwendwa Kivuva via kictanet <kictanet at lists.kictanet.or.ke> wrote:
> 
> As Telkom Kenya through Orange auction off public resources, can we have NOFBI moved from the control of this dinosaur? A lot of taxpayers money has gone into roll-out of NOFBI in the recent past. NOFBI has also been identified as a driver for Vision 2030 in the ICT masterplan.
> 
> http://www.businessdailyafrica.com/Corporate-News/Investors-attracted-by-Telkom-Kenya-real-estate/-/539550/2889436/-/20jgv9/-/index.html <http://www.businessdailyafrica.com/Corporate-News/Investors-attracted-by-Telkom-Kenya-real-estate/-/539550/2889436/-/20jgv9/-/index.html>
> 
> Local and foreign firms fighting to take over French firm Orange’s stake in Telkom Kenya are mainly eyeing the company’s Sh13 billion real estate assets, a valuation report shows.
> 
> Private equity firm Helios and UK’s British Telecom make the list of investors who have recently expressed interest <http://www.businessdailyafrica.com/Corporate-News/Helios-offers-to-buy-French-firm-stake-in-Telkom-Kenya/-/539550/2853620/-/bd661y/-/index.html> in buying Orange’s 70 per cent stake in the Kenyan telecoms operator.The report, which Orange prepared ahead of failed negotiations to sell the stake to Nigerian investors, shows that land, together with frequency spectrums and a vast fibre optic cables network, top the list of assets that the French firm is using to entice suitors as it prepares to exit the Kenyan market.
> 
> The Treasury, which owns a minority 30 per cent of Telkom on behalf of the public and will be co-owner with the new shareholders, has been actively involved in the negotiations.
> 
> Telkom’s vast real estate wealth has never been made public and the valuation, which was done nearly two years ago, shows that the firm has 335 properties priced at Sh9.4 billion.
> 
> The majority of the pieces of land have buildings that host telephone switches, repeaters or microwaves.
> 
> The Investors Information report separately lists Telkom as owning 39.1 hectares of land and real estate properties along Nairobi’s Ngong Road with 11 residential buildings, a sports club and offices all valued at approximately Sh4 billion.
> 
> Telkom owns 23 per cent stake in TEAMs, a 5,000-kilometre undersea fibre optic cable that links Kenya to the global internet superhighway through Fujairah in the UAE.
> 
> The company, which was sold to French firm Orange in 2007 at Sh27 billion, also has a 10 per cent stake in another undersea optic cable, LION2, a 2,700-kilometre cable that connects Kenya to the global network through Mayotte in Mauritius, and an eight per cent stake in the East Africa Submarine System cable.
> 
> Telkom operates 3G, CDMA, GSM and Wimax frequencies that are critical to the rollout of the increasingly important data services as the voice market continues to shrink.
> 
> People familiar with the ongoing buyout talks said that while real estate properties and the frequencies have become key selling points for Telkom, potential buyers have been going deeper and scrutinising how much of the assets are not tied to the company’s heavy debt load. There has also been interest in the technology Telkom is running.
> 
> “Telkom Kenya has a rich mix of frequency spectrums and assets portfolio that would attract any potential investor but sound investment decision goes beyond these,” our source said, adding that potential investors are looking at things such as the number of active sites the company has, revenue streams, and control of revenue leakages such as fraud on fixed lines.
> 
> Curiously, the investor report does not include Telkom’s debt but other reports have shown that by August 31, 2014, its debt to equity ratio stood at 16 – a figure that is way above the statutory limits.
> 
> To compound matters, the two shareholders are yet to agree on how to handle a Sh1.2 billion award that the High Court gave former employees who were retrenched in 2006.
> 
> Telkom also manages the National Optic Fibre Backbone (Nofbi), an inland fibre optic cable network that runs across the district/county on behalf of the government.
> 
> ______________________
> Mwendwa Kivuva, Nairobi, Kenya
> 
> "There are some men who lift the age they inhabit, till all men walk on higher ground in that lifetime." - Maxwell Anderson
> 
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