Telecom

Telkom Kenya And Airtel Kenya Announce Upcoming Merger

Telkom Kenya has confirmed that it plans to merge with Airtel Kenya to form a new joint venture called Airtel-Telkom to boost its market share in the unbalanced telecoms space.

According to a joint announcement made by the companies, the two companies will merge their Mobile, Enterprise and Carrier Service businesses in Kenya to work under a joint venture company that will be named Airtel-Telkom.

Telkom Kenya's specific government services and real estate portfolio will not form part of the new collaboration.

Airtel-Telkom wants to enhance scale and efficiency while growing its distribution network and brand presence. The joint venture will also focus on raising the value of connectivity for SMEs.

An excerpt from the announcement states that Telkom Kenya has the option of being a 49 percent shareholder in the merger.
The merged company’s Chairman will be Telkom Kenya Limited’s CEO Mugo Kibati, while the position of Chief Executive Officer of the new collaborative effort will be filled by Airtel Networks Kenya’s Chief Executive, Prasanta Sarma.

There will be no changes in the respective management of the two companies and the two brands 'Telkom' and 'Airtel' will continue to co-exist.

Both Telkom and Airtel have been vocal about Safaricom's dominance in the Kenyan market and have urged the regulator to ensure a level playing field.
According to the latest quarterly telecoms sector report by the Communication Authority of Kenya (CA), Airtel Kenya had 10,413,732 subscribers, while Telkom Kenya had approximately 4,188,517 subscribers.

Safaricom, the market leader, had 29,943,641 subscribers, dominating 64.7% of the market share.

The ICT Cabinet Secretary, Joe Mucheru said that such mergers have had a relatively positive influence on the development of the sector and also on the service levels to consumers in other markets. He added that the ICT sector looked forward to seeing this merger lead to the introduction of new technologies and telecommunication products which would support the growth of other business sectors of the country’s economy.

The intended merger will go forward subject to approval by the CA and the Competition Association of Kenya.

Credit: This article originated from www.itwebafrica.com

 





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