Sunday, 27 September 2020

Telkom Kenya and Airtel merger collapses

by Harry Baldock, Total Telecom
Thursday 06 August 20

Telkom Kenya has called off move, instead opting for “alternative strategic options” to deliver growth

First agreed back in February 2019, the planned merger of Telkom Kenya and Bharti Airtel’s Kenyan unit has now been called off.   Telkom, Kenya’s smallest operator, in which the state holds 40% equity, said the decision to pull the plug was mutual…

First agreed back in February 2019, the planned merger of Telkom Kenya and Bharti Airtel’s Kenyan unit has now been called off.
 
Telkom, Kenya’s smallest operator, in which the state holds 40% equity, said the decision to pull the plug was mutual, citing regulatory hurdles that had slowed the deal since its inception.
 
Instead, Telkom said it would be focussing on “alternative strategic options”.
 
"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," said Telkom Kenya’s CEO Kibati.
 
The decision has been at least partially influenced by the coronavirus pandemic, with the increased digitalisation being experienced all over the world leading to renewed confidence in Telkom’s ability to go it alone.
 
“Our confidence in Telkom’s new direction is further bolstered by the accelerated digital transformation brought about by the recent dynamics of the COVID-19 [coronavirus] pandemic”, explained Kibati. 
 
The merger was supposed to provide a more robust challenge for Kenya’s runaway leading telco Safaricom, which in 2019 owned around 63.5% of the Kenyan market. Mobile business is still booming in the East African nation, with mobile penetration recently being reported at an all-time record high of 116.1%.
 
 
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