Boston, MA 05/05/2014 (wallstreetpr) – Orange SA (ADR) (NYSE:ORAN) is pulling out of the Kenyan telecoms market. The company’s investment in Kenya had from the start faced mounting challenges. Though the company made significant inroads since entering the market in 2007 by adding an increasing number of subscribers to its network on a yearly basis, profits have been hard to come by. As such, the company believes that selling its stake in Kenya would help avoid further financial burden.
The company’s investment in Kenya started with a joint venture where it acquired 51 percent stake in the state-owned Telkom Kenya. It recently upped its stake in the joint venture to 70 percent. The move to acquire a greater stake in the joint venture reduced government influence and seemed like a strategy to ensure a smooth transaction of its investment in the country.
Bidders step forward
Several multinational telecom operators have stepped forward to bid for a stake of Orange SA (ADR) (NYSE:ORAN) in Kenya as the French company prepares to call it a day in the East African country. Among the bidders are Viettel Group, MTN and a British telecom firm whose identity has not been revealed.
Viettel Group is Vietnamese state-run telecom carrier that reportedly operates in six countries. The company was reportedly the first one to step forward with a bid for Orange. Viettel had earlier on tried to circle yuMobile for an acquisition. yuMobile is yet another telecom operator that is set to leave the Kenyan market as competition becomes red-hot.
MTN is a South African carrier that operators in many countries, in Africa, yet has all along sought presence in Kenya without success and the exit of Orange SA (ADR) (NYSE:ORAN) from Kenya could give it an opportunity to enter the market for the first time through acquisition.
The U.K. firm that is also circling Orange Kenya for acquisition remains anonymous, though Vodafone Group Plc (ADR) (NASDAQ:VOD) is one U.K. carrier that has in recent times increased presence in emerging markets and Africa in particular.
Exiting Kenya
The planned exit from the Kenyan telephony market is expected to save Orange SA (ADR) (NYSE:ORAN) a great deal of money as its operations in the country have yielded little but losses, thus, impacting shareholder value.
