Rumours have been running for over a year that Telkom and Airtel were planning to merge their operations in a bid to augment their product and service offerings to match the services of Safaricom. Safaricom had also been mentioned in the competition clause by both Telkom and Airtel that highlighted their inability to grow based on Safaricom’s lion’s share of the local mobile operator business.
India’s Bharti Airtel anouncement on Friday reut.rs/2SyMMhc that its unit, Airtel Networks Kenya Ltd, has agreed to merge with Telkom Kenya Ltd, the East African nation’s smallest telecom operator is now active.
A report that investigated the claims is yet to be fully examined by the Communications Authority of Kenya (CA) and parliament, and there is a likelihood it will be discarded based on a latest development that has just arrived at our desk a moment ago.
Telkom Kenya and Airtel Kenya have now officially made public the commencement of merger plans. The binding agreement was signed sometime today, implying that the two carriers have agreed to merge their mobile, carrier and enterprise services.
Telkom and Airtel have signed a binding agreement to operate under a joint venture company to be named Airtel-Telkom.— Telkom Kenya (@TelkomKenya) February 8, 2019
Telkom’s current CEO Mugo Kibati will serve as the Chairman of the entity to be formed. On the other hand, Airtel Kenya’s Chief Executive Prasanta Sarma will have his hat bumped up to CEO of Airtel-Telkom.
The two carriers will operate under a single entity named Airtel-Telkom if and when regulatory approvals allow.
It is also worth noting that the Telkom’s real estate portfolio and unnamed government services will not be part of the combined deal. What’s more, the final shareholding will be discussed and revealed at a later date.
Telkom will also have the option to hold up to 49 percent of the shareholding.