Bharti Airtel In Negotiations To Acquire Telkom Kenya
Bharti Airtel is in talks to purchase Telkom Kenya, which will help the telco sink its roots deeper in the east African market and boost the valuation of Airtel Africa.
Telkom Kenya is the third-largest telecommunications operator in Kenya with more than 5 million customers, following behind market leader Safaricom that has over 30 million users and Airtel Kenya, with more than 10 million customers. Telkom Kenya is 60% owned by the UK private equity company Helios Investment Partners, and Kenya’s government owns the rest.
The telco’s head of India and the Middle East, Analysys Mason, said that the takeover of Telkom Kenya would increase Airtel Africa’s total valuation as it would accumulate value because of the scale-driven synergies, which are crucial in the Africa market.
Sanjay Kapoor, the former Chief Executive of Airtel, said the level of improvement in Airtel Africa’s total valuation would depend on a number of factors, including the total amount that Airtel actually pays to acquire Telkom Kenya and the level of pricing power that the telco gains in the Kenyan telecom market.
Between 2017 and 2018, Airtel Kenya’s subscriber numbers jumped almost 71% to over 10.4 million, increasing its overall market share by 7.4 percentage points to 22.3%. Safaricom has a market share of 65%.
Insiders familiar with the situation said that Airtel Kenya’s growth had been driven by a combination of increased mobile, voice data and money transfer transactions in the East African country.
Airtel Africa is based in the UK and is the holding company of Bharti Airtel’s operations in 14 countries in Africa. Airtel is the second-largest telecommunications operator on the continent with a customer base of approximately 94 million and ranking in the top two of most markets.
Credit: This article originated from www.economictimes.indiatimes.com