Airtel Kenya had been driven by a combination of higher voice, mobile data and money transfer transactions in the eastern African country.
Bharti Airtel is in talks to buy Telkom Kenya, which will help the Sunil Mittal-led telco emerge stronger in the east African market and improve overall valuation of Airtel Africa in the run-up to its initial public offer (IPO), likely in May-June.
Telkom Kenya is the third-largest telco in Kenya with over 5 million users, behind market leader Safaricom with over 30 million and Airtel Kenya, with 10 million-plus customers. It is 60% owned by UK private equity firm Helios Investment Partners and the rest by Kenya’s government.
Bharti Airtel is learnt to be in preliminary talks with Helios, though it will probably inform the Kenyan telecom regulator only if discussions lead towards a potential deal, people aware of the development informed Economic Times.
Airtel Kenya’s performance
Rohan Dhamija, head of India and Middle East, Analysys Mason, informed ET that any potential Airtel takeover of Telkom Kenya will increase Airtel Africa’s overall valuation as it would be value-accretive, given the scale driven synergies, which are so important in the Africa market.
Former Airtel chief executive Sanjay Kapoor informed that the degree of improvement in Airtel Africa’s overall valuation would hinge on a host of factors, including the quantum of premium Airtel actually pays to buy Telkom Kenya, synergies that get drawn by virtue of such a consolidation and the level of pricing power gained in the Kenyan telecom market.
Insiders familiar with the matter said to the English Daily that growth for Airtel Kenya had been driven by a combination of higher voice, mobile data and money transfer transactions in the eastern African country.