alexa Telkom hits out at Safaricom over merger plans with Airtel - Daily Nation

Telkom hits out at Safaricom over merger plans with Airtel

Tuesday September 3 2019

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A Telkom Kenya shop near the company's headquarters in Nairobi, Kenya. FILE PHOTO 

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Telkom Kenya has accused market leader Safaricom and the Ethics and Anti-Corruption Commission (EACC) of frustrating its merger plans with Airtel.

In a rare public spat, the telco says Safaricom wants to delay the process that seeks provide customers with more credible options.  


“Does the dominant player not want to see this sector grow? Is the dominant player wary of competition, and even more precisely, wary of competitive pricing, choice and value for money for the consumer?” Telkom Kenya Chief Executive Officer Mugo Kibati told a press conference on Tuesday.

Safaricom interim CEO Michael Joseph said on Friday that the firm had written a letter to the market regulator raising some of its concerns that it wants looked into before approving the merger.

“On Friday, August 30, 2019, Safaricom informed the media that it had written to the Communications Authority, to urge the industry regulator not to approve the intended merger of businesses, as it had concerns that it wanted addressed first,” Kibati said.


This move appears not to sit well with Telkom, which now sees it calculated to sabotage the merger.

“The intended merger of some of our businesses with Airtel, will result in the formation of an entity with enhanced scale that will enable Kenya’s sector have one last stab at a competitive environment, despite the tough forces at play,” Kibati said.

“We have no quarrel at all with our colleagues at Safaricom, we are simply trying to restructure and improve our own business and for the good of the industry. It is unfortunate, however, that Safaricom now wants to delay this process that seeks provide customers with more credible options,” Kibati added.

Safaricom is yet to respond to these allegations.

On EACC, Telkom says it has given the ethics commission all the information they have requested and will continue to cooperate on the matter up until a substantive conclusion is reached.

“I need to reiterate that the current Transaction between Telkom and Airtel is still an ongoing process, but one that has so far followed due legal and regulatory processes,” Kibati said.

EACC in investigating allegations of misappropriation of Public funds in the process of the recapitalization and restructuring of the balance sheet of Telkom Kenya in 2012.

“This investigation now impacts the progress of the intended Transaction, as the requisite regulatory bodies have since put a pause on the approval process,” Telkom added.

Telkom is counting on the merger plans with Airtel, which will create an entity known as Airtel-Telkom, to take on Safaricom and end its loss-making streak.

It has also announced that it plans to fire 575 staff in the process, and ask them to reapply to the new outfit.