From left: Telkom Kenya chief technical and information officer John Barorot, chief executive officer Aldo Mareuse and head of mobile business division Amer Atwi during a media briefing in Nairobi on June 14, 2016. PHOTO | SALATON NJAU
What you need to know:
Telkom Kenya will appoint a head for its newly-created real estate unit, signalling the company’s focus on the division as a major revenue earner.
Telkom’s vast real estate wealth is estimated at Sh13 billion, according to a valuation report Orange had prepared ahead of failed negotiations to sell the stake to Nigerian investors in 2015.
Helios Investment Partners, the new majority shareholder of Telkom Kenya, has set up a real estate division to tap into the telecom company’s Sh13 billion prime property holdings, the new chief executive said Tuesday.
Aldo Mareuse said Telkom Kenya will appoint a head for its newly-created real estate unit, signalling the company’s focus on the division as a major revenue earner.
Mr Aldo unveiled the reorganised business structure that includes the real estate, mobile and fixed telephone units.
Telkom’s vast real estate wealth is estimated at Sh13 billion, according to a valuation report Orange had prepared ahead of failed negotiations to sell the stake to Nigerian investors in 2015.
Under the reorganised business structure, George Kebasso, the company’s chief carrier services officer, has been appointed the head of wholesale division while Amer Atwi, joins the company as head of mobile division.
Prior to the appointment, Mr Atwi was the managing director Comium, a mobile telecoms operator in Gambia.
“The company has reorganised its structure in four business divisions, mobile, fixed, wholesale and real estate. The heads of fixed, real estate business divisions will be named in the due course,” Mr Aldo said during his maiden media briefing Tuesday. Francois Bresson, the company’s chief finance officer, has been retained in his position.
John Barorot, a former Safaricom chief technical officer, joins the firm as chief technical and information officer.
A Telkom Kenya valuation 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.
Mr Aldo Tuesday declined to provide any information regarding the Helios business strategy and as such the Business Daily could not exactly establish how the newly created real estate division will operate.
“I will disappoint you today in that I am not giving any information regarding our business strategy. One, because we are not listed and secondly, because of the competitive nature of the sector,” said Mr Aldo
“Telkom Kenya’s long heritage in the telecommunications sector positions the company well to tap into the emerging opportunities brought about by the technological and market changes in the sector.”
The setting up of the real estate division is in line with early analysts’ predictions that had said the potential investors were eyeing Telkom Kenya mainly for two key reasons - the real estate properties and the frequencies.
Telkom owns a 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.
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. Under the contract, Telkom earns Sh250 million in annual maintenance fees.
The elaborate infrastructure has, however, not translated to market-share advantage for Telkom that still trails its competitors in the retail voice and data market.
On Friday, Helios and the Government of Kenya inked the buyout deal. Under the deal, Helios owns 60 per cent while the government owns 40 per cent.
Also under the agreement, Helios Investment Partners will provide a shareholders loan of Sh30 billion to the telecommunication company – of which the Treasury will , once the Telkom Kenya starts making money , receive a repayment for the shareholders loan to the tune of Sh12 billion-equivalent to its 40 per cent stake in the company.
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