This archive report was first published on 14 December 2019.
On December 14, 2019, the Competition Authority of Kenya (CAK) approved the planned merger of Airtel Kenya and Telkom Kenya, paving the way for the creation of a new telecoms giant. However, the deal comes with conditions that are set to favor Safaricom, the market leader in Kenya's telecoms industry.
According to a CAK notice, the merged entity, to be named Airtel-Telkom, will be restricted from entering any other sale transactions in the next five years. The notice also states that 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.
Furthermore, Telkom will have to surrender one of its spectrums to the government when it expires, specifically its 900 megahertz (MHz) and 1800MHz, in favor of Safaricom. This move is seen as a way to block any other telco merge with Airtel-Telkom, thus allowing Safaricom to retain its market leader position.
As part of the deal, Airtel and Telkom are expected to retain at least 349 staff from the current pool of 674, with Telkom being ordered to keep a minimum of 114 members of its staff. The merged entity will also have to pay market rates to use the State-owned National Optic Fibre Backbone Infrastructure (Nofbi), which is among the facets of the Telkom business that will not be transferred to the merged operator.
