Telecommunications companies Airtel and Telkom have announced a merger of the two companies, a move that may shake up the industry.
The companies will combine their respective mobile, enterprise and carrier services businesses in Kenya to operate as Airtel-Telkom
The motive behind the plan is to create a stronger challenger for Safaricom, the market leader.
The merged company will be chaired by Telkom CEO, Mugo Kibati while Airtel Chief Executive, Prasanta Sarma, will be appointed Chief Executive Officer.
“It is common practice within the ICT industry to conduct exploratory conversations; to assess the market for areas of synergy, co-operation, and partnership, with the intent of giving customers greater value and superior experience,” Kibati told Business Daily.
When asked for opinions on the deal, ICT Cabinet Secretary Joe Mucheru stated that the two companies should be the ones to give information.
"All our discussion between businesses and government are between us. We have no authority as the government to talk about what our discussions are all about,” Mucheru said in a phone interview.
Latest data from Communications Authority of Kenya (CA) covering three months to September showed Airtel had a market share of 22.3 per cent while Telkom had nine per cent.
A successful deal could hand them a combined share of 33.3 per cent against Safaricom’s 64.2 per cent.
In 2018, reports of a planned merger between the two telcos surfaced but did not materialise.
Safaricom chairman Nicholas Nganga then commented that the telco was following the deal closely.
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