Telkom Kenya CEO Mugo Kibati is poised to serve as chairman of the new entity, while Airtel Kenya Managing Director Prasanta Sarma chief executive. This year has been rocky for companies registered in Kenya.
And while some have made efforts to endure and remain afloat, some were forced to fold their operations.
In February 2019, the second and third largest mobile service companies in Kenya announced the signing of a binding agreement setting in motion plans to set up a joint venture company, Airtel-Kenya.
This caused ripples in the telecommunication sector as analyst backed the consolidation strategy to challenge Safaricom’s two-decade run as the most dominant service provider.
Communications Authority fourth quarter statistics ending June 2019 indicate that Safaricom controlled 63.5% of the market share translating to 33.1 million subscribers.
Airtel came in second with 12.8 million subscribers or 24.6% of market share.
Telkom Kenya comes third with 4.2 million subscribers translating to 8.1 per cent of the market share.
The combined entity, Airtel-Kenya would have a market share of 32.7%.
However, it was not all applause for the deal as opposition arose.
First, from Safaricom who called clearance of debt it is owed by the two operators before the deal is given a green light.
Safaricom indicated that the said debt amounted to Kshs 1.3 billion shillings incurred for the provision of interconnection, co-location and fibre services.Safaricom demanded the debt obligations should be settled in full before the transfer of business is affected.Safaricom also demanded CA rebalances the frequencies allocation after the merger given that the Joint Venture Company Airtel-Telkom will hold 77.5 MHz of the spectrum against a customer base of 17 million, compared to Safaricom’s 57.5 MHz with a customer base of 31.8 million.Similarly, the firm called for equal treatment of operators and the creation of a level playing field when it comes to licensing and operation requirements.Parliament also questioned the nature of the deal and its effects on industry and employees.CA hinted to back the deal in a Kenya Gazette Notice after the two met set conditions. EACC also rejected the merger pending investigations into past dealings.The deal, however, received a shot in the arm from the Competition Authority of Kenya early December provided the entity does not make any new form of sale agreements within the next five years.And should the Airtel-Telkom show signs of failure, the CA is obligated to commence a forensic audit at the expense of the firm.Telkom Kenya is […]