This archive report was first published on 27 August 2019.
Published on August 27, 2019, the Communications Authority of Kenya (CA) has suspended the merger between Airtel Kenya and Telkom pending investigations by the Ethics and Anti-Corruption Agency (EACC).
The move comes as a blow to the two telcos, which were set to form a joint venture unit known as Airtel-Telkom, excluding Telkom's real estate portfolio and specific government services.
CA has halted the merger, citing the need for the EACC to clear the transaction. The anti-corruption watchdog is probing how the merger deal was brokered between Kenya's second and third-largest mobile phone operators.
Ownership of Telkom Kenya is divided between UK-based Helios Investment Partners (60%) and the Kenya government (40%). A separate EACC investigation into the circumstances under which Treasury ceded further ownership of Telkom Kenya to French telco Orange is also ongoing.
The merger between Airtel and Telkom is seen as an attempt to challenge Safaricom's dominance in the Kenyan market. Safaricom currently holds around 54.2% of the market share, with Airtel boasting approximately 22.3% and Telkom at a distant third with 9%.
Already, the merger between Airtel and Telkom has hit bumps on the road, with lawmakers raising the red flag over the deal. Former employees of both firms have also taken Airtel and Telkom to court, claiming inadequate compensation, and wanting the courts to stop the deal until their grievances are resolved.
