This archive report was first published on 5 May 2020.
On May 4, 2020, the Competition Tribunal made a significant ruling that overturned a majority of the conditions imposed on the Airtel-Telkom merger. This decision has brought back to the table the merger conversation that had gone quiet, allowing Airtel and Telkom to redirect their concentration to eating into Safaricom's 64.8% market share.
The tribunal observed that several conditions did not augur well for healthy competition in the telco business. As a result, Airtel and Telkom have been allowed to keep their existing network licences, including a condition that barred the two units as a merged entity from selling or transferring some of their operating and frequency spectrum licences until the merger duration expires.
However, the tribunal maintained the provision requiring the merged entity to furnish the regulator with annual reports on the compliance with merger conditions for up to two years. Additionally, the regulator stayed a condition stipulating that the merged entity should maintain at least 349 of Airtel and Telkom's existing 674 employees.
It is worth noting that Safaricom had also wanted the two units to pay up their dues before the merger process could be approved. Safaricom wanted immediate clearance of Ksh1.3 billion in debt accrued by the pair and a rebalance of frequency allocations. This prompted Airtel and Telkom to appeal the conditions in February.
Statistics posted by the Communications Authority of Kenya (CAK) show that Safaricom lost 765,038 subscribers between October and December 2019 but still remains the dominant player in the telecommunications sector commanding 64.8% of the market share.
