- The New telecom licensing policy unveiled by Joe Mucheru, the ICT Cabinet Secretary has granted telecoms firms up to March 2024 to ensure local ownership of at least 30 percent in the companies.
- The government initiative is aimed at encouraging local ownership of ICT firms.
The New telecom licensing policy unveiled by Joe Mucheru, the ICT Cabinet Secretary has granted telecoms firms up to March 2024 to ensure local ownership of at least 30 percent in the companies. The government initiative is aimed at encouraging local ownership of ICT firms. A cap of local ownership of 20 percent has been in place since 2008.
A few firms, like Airtel Kenya, have been exempted from the shareholding rule. Through the new Gazette notice, it has directed firms that had secured waivers on the local ownership rule to comply within three years.Experts are of the view that it could also lead to a number of firms seeking listing at the Nairobi Securities Exchange (NSE) for compliance. So far Kenyan laws have no requirement for listing on the NSE unlike in Uganda, where telecoms operators must list at least 20 percent of their shares on the Uganda Stock Exchange (USE) by October. India’s telecom giant Bharti Airtel fully owns the Kenyan unit. It was granted an exemption to the local shareholding rule without a limited period for compliance in March 2013.A perceived mismatch between Airtel’s valuation and local investors’ assessment of its worth caused problems for the company in finding a buyer for the stake.
Airtel Kenya posted a combined loss of Sh3 billion in the year to March 2020, raising its cumulative losses to above Sh70 billion. Safaricom returned a profit of Sh74.6 billion in the same period. The fierce price war between Airtel and Safaricom forced Airtel to adopt a low price model. Though it helped it to gain market share, it failed to make it profitable.
