Airtel Owner Is Considering Exiting Kenyan Market

Bharti Airtel CEO Gopal Vittal has summoned his right-hand man in Africa Raghunath Mandava to weigh up the worth of his Kenyan business according to information availed to Kenya Insights.

This follows Nairobi’s request the company give up 30% of its capital to Kenyan businesses by 2024.

Nairobi’s announcement on 9 April that all foreign operators would have to open up 30% of their capital to Kenyan businesses by 2024 has shaken Bharti Airtel’s leadership. With the Indian telecoms major’s attempt to convince telecomms minister Joe Mucheru to delay that date until 2026 having fallen upon deaf ears.

CEO Gopal Vittal has summonned his representative in Kenya Prasanta Das Sarma and the head of the company’s Africa division Raghunath Mandava, also based in Nairobi, to study the possibility of closing down the shops.

According to National Information Communication and Technology Public Policy Guidelines of 2020, ICT companies from abroad will now give Kenyans a 30 percent stake to be considered Kenyan.

The international companies with an interest in the Kenyan market will have to give the 30% stake to be considered as Kenyan companies in a push for a local stake as a requirement to obtain licenses in the country. Companies were given 3 years to comply with the local ownership regulations. The time frame was a subject to a one-year extension by the ICT Cabinet Secretary upon request.

“It is the policy that only companies with at least 30 percent substantive Kenyan ownership, either corporate or individual, will be licensed to provide ICT services. For purposes of this rule, ICT companies without a majority Kenyan ownership will not be considered Kenyan, and may thus not be calculated as part of the 30 percent Kenyan ownership calculus,” reads the policy in a recent Gazette Notice.

The regulation is part of a government effort to grow the ICT Sector in Kenya by encouraging equity participation among Kenyans.

Listed companies will conform to the equity participation rule ‘to the extant rules of the Capital Markets Authority’.

The new law also requires that the government ICT procurement processes will give preference to local ICT companies in the award of tenders, including in sectors like security and defense. Further, where local businesses cannot fulfill tender requirements, foreign companies will have to transfer skills to local firms.

“Kenyan built solutions will be preferred over any other solution; where there are no local businesses that meet the tender requirements, skills transfer to local firms and personnel will be a mandatory requirement,” continues the Gazette Notice.