Airtel, Telkom Fail to Merge to ‘Fight’ Safaricom in Kenya

Airtel Telkom
Image Credit: Tech Gist Africa

By Dipo Olowookere

The earlier plans to make Airtel Networks Kenya Limited and Telkom Kenya Limited become a single entity in the country have suffered a setback.

This is because the merger talks have crumbled after both parties decided not to go ahead with the proposed transaction.

Airtel Kenya is a subsidiary of Airtel Africa Plc, a company listed on the Nigerian Stock Exchange (NSE) to trade its shares.

In February 2019, it was announced that both telecommunications companies in Kenya were planning to combine their businesses in the East African nation.

The reason for the proposed merger was to create an integrated telecommunications platform with mobile, enterprise and wholesale divisions.

But after a long process of putting finishing touches to the deal, both parties decided to pull the plug and remain as separate entities.

In a notice to the stock exchange, Airtel Africa said efforts were made by the respective firms to “reach a successful closure” but after a “very lengthy process” the two organisations “have decided to no longer pursue completion of the transaction.”

In his reaction, the CEO of Airtel Africa, Mr Raghunath Mandava, stated that, “Kenya is a large and growing market and we remain committed to building a growing profitable business.

“We currently serve more than 14 million Kenyan customers, a number that is growing month on month, and in the last quarter, our revenue numbers were up double-digit in constant currency in Kenya.

“Our strategy to focus on winning more customers, invest in a best in class voice and data network and progressively expand our mobile money business, will continue to build on these results in order to deliver against the opportunities the Kenyan market has to offer.”

Business Post gathered that in August 2019, an anti-graft commission in Kenya suspended the planned merger of Airtel Kenya with partly state-owned Telkom Kenya, pending a probe into allegations about the misappropriation of public funds at Telkom.

But in December 2019, the merger was approved by the Competition Authority of Kenya (CAK).

The two firms were planning to come together under a new name, Airtel-Telkom, to give a tough competition to Safaricom, which controls nearly two-thirds of the market in terms of subscribers in Kenya.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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