Sh1bn claim dims Airtel-Telkom deal merger

Monday August 12 2019

Airtel shop in Nairobi. FILE PHOTO | NMG

Former employees of Airtel have opposed the merger of the firm with Telkom Kenya pending conclusion of a suit where the workers are seeking Sh1 billion for their layoff.

Through a notice to the Communications Authority of Kenya (CA) they reckon the merger will make it difficult to recover the Sh1 billion should they win the labour dispute where they claim they were wrongly sacked in January 2016.

The 52 workers through their lawyer Duncan Okatch were responding to a July 12 Kenya Gazette notice from CA, which had offered firms and individuals 30 days to raise objection to the merger.

Airtel in February said it had had agreed to merge with Telkom Kenya to create a stronger challenger to market leader Safaricom whose 65 percent market share has curbed competition.

“To a larger extent, the merger is being carried out in a clandestine manner and it is strategically structured and implemented to deny our clients access to the potential fruits of their claims in the court of law,” Mr Okatch said.

The former Airtel workers have quoted five reasons they are opposed to the merger, chief among them being the refusal of the merged entity to shoulder liabilities of Airtel Kenya and Telkom Kenya.


They hinge their claim on a notice issued by Telkom Kenya stating that the “new entity is not assuming nor does it intend to assume the liabilities incurred by the entities merging.”

The workers reckon that Airtel may rely on the Telkom Kenya notice to frustrate their claims.

Those opposed to the deal say the merge will create a separate firm to run the core business of mobile telephony, leaving a shell firm that would struggle to clear their Sh1 billion claim should they win the employment row.

“It means the companies to be left behind will be shells of themselves well incapable of taking care of their expenditures because the core businesses taken away were their pillars,” say the ex-Airtel workers.

The merged company will combine their respective mobile, enterprise and carrier services businesses in Kenya to operate as Airtel-Telkom, both firms said in an earlier statement.

The merger deal will not involve Telkom Kenya’s extensive real estate holdings and some government contracts for unspecified services, the company said.

Telkom accounted for 7.9 percent of Kenyan mobile telecom subscribers in March, behind second-placed Airtel, which had a 26.1 percent market share.