Telkom Opts Out of Proposed Merger With Airtel

Kevin Namunwa | Aug 6, 2020

The much-anticipated merger between Telkom and Airtel has fallen out after the former decided to opt-out of the proposed deal.

The two telcos have been in discussion about the merger for almost a year now with Kenyans anticipating the deal to happen. The merger was expected to finally provide some competition to market leader, Safaricom.

In a press statement, Telkom Kenya said that the decision to end plans about the merger was a mutual agreement by both parties.

“Considering the challenges experienced in getting all the approvals required to complete the transaction, the company has simultaneously been evaluating alternative strategic options to strengthen its position and offering, within the market, as a genuine alternative for the consumer, enabling us to entrench our current brand as Kenya’s preferred data network service provider,” reads the statement in part.

Discussions about the merger began in February 2019, when Airtel Networks Limited offered to buy Telkom Kenya.

Both parties agreed to the deal and the merger was to happen owing approval from the telcos regulator, Communications Authority.

Telkom Kenya had earlier, in 2007, sold 40% of its stake to the government. The company was ready to sell the rest of its stake to competitor, Airtel Networks, and help compete fairly with Safaricom but discussions have since fallen out.

According to the latest statistics from the Communication Authority of Kenya, Airtel gained by 0.7 percentage points to post a 26.6% market share recording a 4% increase in mobile subscribers.

Airtel subscribers grew from 14,118, 569 in December 2019 to 14,682,293 in March 2020.

Telkom Kenya lost 0.4 percentage points to post a market share of 5.8% with 3,190,661 subscribers.

Kenyans had anticipated the merger knowing it will finally bring some competition to Safaricom.

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