The debate over who takes possession or gets a piece of Kenya’s sole fixed-line operator, Telkom Kenya run under the France Telecom brand Orange, is on.

The French conglomerate that owns a 70 percent state in Telkom Kenya – that was once Kenya’s largest employer – informed the Government of Kenya, which owns the remaining 30 percent of shares, of its intent to sell off its stake earlier this year.

The French company has already exited it holdings in Orange Uganda, selling a majority stake to Africell Holding, in a continent wide restructuring plan that will see exit the east African market.

However, discussions on what strategy the French have up their sleeve in the sale of its Kenyan subsidiary are still under wraps, with delicate negotiations said to be happening behind closed boardroom doors.

At stake are Orange Telkom’s long term contracts with the Kenyan government, including managing one of the undersea fiber optic cables, disputes over payment of workers retrenched from the firm when the French came on board as well as commitments with international firms and financiers, all positions that Orange Telkom cannot simply walk away from.

“Orange Telkom has in the past expressed its frustrations with its partner (Government of Kenya) over the latter’s failure to inject its share of the capital required. This is perhaps why Orange Telkom could be looking for a new partner either to buy out the government or buy some stake,” Benson Okwaro, Secretary General of the Kenya Telecommunication Workers Union (KTWU) told AFK Insider.

Eyeing a stake in Orange Telkom is Vietnamese-based Vietell Group, South Africa’s MTN and a UK firm whose name is yet to be disclosed.

According to rankings by GSMA’s Wireless Intelligence, Viettel is one of the world’s fastest growing telecom operators and is placed among the top 15 telecom companies in terms of cellular connections.

Is Viettel the top contender?

It presently operates in eight markets across Asia, Latin America and Africa, covering a total population of nearly 170 million people.

It is headquartered in Hanoi, Vietnam and is currently a leading ICT Group in terms of infrastructure, subscriber numbers and profit with a market share of 51 percent.

“At the moment, there is no obvious front-runner although what is clear is that the French are exiting Kenya’s telecoms sector. The most likely buyers of Orange’s substantial – by Kenyan standards – fixed line business would be one of the other operators in the country,” Peter Wanyonyi, a Kenyan IT expert based in Dubai told AFK Insider.

He describes Kenya’s telecom market as largely driven by value-added services (VAS), rather than voice revenues.

“Orange has been lacking a strong enough VAS offering to take on the competition, including Safaricom’s money transfer service: MPESA. There is, in the end, no reason for anyone to take up Orange’s services, hence their problems in the market,” said Wanyonyi.

While Orange Telkom has been struggling to crack the Kenyan market and make profit, it has been in and out of trouble with parliamentary watchdogs, copper wire vandals, intense rivalry from competitors or a generally unsympathetic customer.

The tide worsened for Orange Telkom around September last year when the Public Investment Committee (PIC) – a powerful parliamentary watchdog – set off a probe into a deal that ended with the French firm increase its shareholding from 61 percent to 70 percent without notifying the relevant regulatory authorities.

These authorities include the Communication Commission of Kenya or the Ministry for Information and Communications Technology.

In a sale transaction deal signed in December 2012 between Government of Kenya and France Telkom, it was agreed that the government will pump in 2.4 billion shillings ($27.3 million) into Telkom Kenya before June 30, 2013.

Failure to do this meant that the Government would lose 10 percent of its shareholding in the telecommunications firm, leaving it with a paltry 30 percent from an initial 40 percent shareholding.

Although information about the French telecom player’s exit plan remain scanty, it is certain that it will take some time to iron out issues.

“What is clear, however, is that getting   a buyer within the timeframe the French investor has prescribed may not be as easy considering the tacky legal issues surrounding Telkom Kenya,” said Jaindi Kisero at Daily Nation