5 March 2018

Kenya: Telkom to Get Sh4 Billion for Network Upgrade

Telkom Kenya is set to receive a Sh4.1 billion ($40 million) loan from the European Investment Bank to boost infrastructure and mobile money network.

The European Investment Bank (EIB) said the loan, which is still going through appraisal, will only form part of the funding for Telkom Kenya's Sh9.34 billion ($92 billion) network expansion project.

"The promoter [Telkom Kenya] will invest in its mobile network to improve its coverage and quality of services, especially for mobile services, and will launch an open eco-system mobile financial service product," says EIB in a disclosure statement.

EIB's policy does not allow it to disclose other financiers that may be involved in the project. Telkom Kenya was also tight-lipped about this information, declining to confirm even the EIB deal and only saying that it is "in talks with several financing partners for funding".

The mobile operator further said that its five-year strategy is to invest a total Sh15.2 billion ($150 million) in its 3G and 4G networks as well as mobile financial services and customer experience.

Private equity firm Helios bought into Telkom Kenya in 2016, saying it intended to rescue the ailing company through heavy investments and an overhaul of management.

Telkom Kenya says it has already invested about Sh5.6 billion in expanding and modernising its network, including launching 4G services.

There are early signs that these efforts may be bearing fruit. Statistics from the Communications Authority (CA) indicate that the operator had about 3.4 million subscribers in September 2017, in comparison to 2.92 million customers a year earlier.

The data shows that the Telkom Kenya's voice traffic market share has however been on the decline. Its data market share, inched up from 6.20 per cent in June 2017 to 7.30 per cent in September 2017.

The company is also set to relaunch its mobile money business.

Telkom Kenya last year decommissioned its Orange Money product with the aim of launching a new service after takeover by Helios.

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