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France Telecom set for Kenyan acquisition

Consortium led by France Telecom wins bid to acquire Telkom Kenya stake.

A consortium led by France Telecom is set to acquire a 51% stake in Telkom Kenya, the country's incumbent telecom operator, for $390 million, after being selected as preferred bidder by the Kenyan government.

France Telecom will work with Telkom Kenya, which has some 280,000 fixed-line customers, to develop mobile, fixed and internet-based services to be rolled out under the Orange brand. With mobile penetration at less than 30%, Kenya is widely viewed as a market with high growth potential.

France Telecom will also benefit from the existing infrastructure of Telkom Kenya to develop and launch its 2.5 G network in the next year. Plans to lay submarine cables in 2009 are also expected to give Telkom Kenya the means to offer competitive prices for high-speed internet services.

France Telecom teamed up with Alcazar Capital Ltd, which took a 15% stake in the consortium, to make the bid. The deal is expected to close before the end of the year.