Airtel-Telkom Merger Approved But Under The Following Conditions

Image Courtesy The Standard

The merger between Airtel Kenya and Telkom has been in the works for a number of months now, facing many hurdles along the way. The Airtel-Telkom deal, which had been suspended pending corruption investigations as to how the deal was forged, has finally received regulatory approval from the competition authority of Kenya.

In a gazette notice published on December 13 2019, the competition authority notes that the merger between Airtel and Telkom can take place under the following conditions:

  • The merged entity shall not sell or transfer current Operating and Frequency Spectrum Licences within the remaining duration of the said licenses.
  • Upon expiry of the term of the merged entities’ operating license, the spectrum in the 900MHZ and 1800MHZ acquired from Telkom shall revert back to the Government of Kenya.
  • The merged entity, or part of it, is restricted from entering into any form of sale agreement within the next five years. However, in the event of any indication of a failing firm within the period, the Communications Authority shall conduct a forensic audit at the cost of the merged entity.
  • The merged entity shall honour all the existing contractual terms with GoK entities.
  • The merged entity shall only access the 4,204 km of fibre managed by Telkom on behalf of GOK at the current market rates and no preferential rates shall be accorded to them unless as provided for in existing contracts.
  • The merged entity shall not enjoy any preferential access to use capacity on the 4,204 km of fibre managed by Telkom on behalf of GoK.
  • The merged entity shall ensure that at least 349 of the 674 employees of the target are retained as follows:
    • 120 employees by the merged entity for a period of two years from the date of the implementation of the merger
    • 114 employees by Telkom Kenya Limited for a period of two years from the date of the implementation of the merger
    • 115 employees to be absorbed by the network partners of the merged entity
  • The merged entity to annually furnish the Authority with a detailed report on compliance with the above conditions.

With this hurdle out of the way, what’s left is for Airtel and Telkom to announce their marriage. Telkom Kenya’s CEO had stated that the merger should be completed within this year, if this is still the case, then we should be getting an announcement soon.

Gadgets Africa’s Take:

While we welcome the seemingly better competition that the combined effort of Airtel-Telkom will bring into the market, a number of questions are raised; especially in regards to what subscribers stand to gain since up until now, the merger seems like a good thing for the two telcos and that where it ends.

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