Proposed Telkom-Airtel Merger Apparently Caused a Drop in Internet Subscribers

Image Courtesy The Standard

Mobile internet subscribers in the year to March fell 16.38% due to the market uncertainties caused by the proposed merger between Telkom Kenya and Airtel.

This was revealed in the latest report by the Communications Authority of Kenya (CA) saying that there were 38.85 million internet subscribers as of March 2020. This was a decline from 46.46 million in a similar period last year.

CA went ahead to explain that this downturn is attributed to the proposed merger between the telcos that unfortunately never went through. According to the report, Telkom Kenya’s share in the mobile data market in March shrunk to just 5%. This is because the firm’s internet subscribers chose to shift to its rivals amid the uncertainties.

Telkom Kenya and Airtel had entered into an agreement on February 8th, 2019 to combine their mobile, enterprise and wholesale divisions.

Telkom also decided to scale its investments in the mobile data market whilst preparing for a unified business approach with Airtel Kenya thus bringing about the uncertainties to its subscribers.

The merger deal then collapsed last month after lacking approval from the country’s lawmakers. The two telcos cited unacceptable conditions placed on the amalgamation alongside delays in receiving regulatory approvals.

“Total data/Internet subscriptions dropped by 0.7% during the review period to stand at 39.3 million… This is mainly attributed to the decline in the number of mobile data subscriptions posted by Telkom Kenya Limited during the period under review,” CA says.

Later on, Telkom Kenya did come out promising to rise from the setback by revamping its data business in efforts to grow its revenues.

The telco added that it would enter the lucrative fibre internet to homes and offices maximising on the COVID-19 interruptions that have caused the spike in the use of the internet as most people opt to work from home.

At the moment, Mwananchi-owned Zuku still stands as the biggest fibre internet provider closely followed by Safaricom.

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