Govt Paves Way for New Giant Telco

UPDATE: August 5,2020: Telkom and Airtel have decided to terminate the planned merger.

The companies cited frustration in the process which would have seen them command a combined 32.4 %

“After carefully reviewing the available solutions, Telkom has opted to adopt an alternative strategic direction and will no longer be pursuing the proposed joint venture transaction,” Telkom CEO Mugo Kibati explained. 

The company will now explore another strategic direction and take advantage of the reliance on technology occassioned by Covid-19.

“The transformation dynamic also presents Telkom with a strategic advantage , to better its infrastructure asset base and services, to support digitization, bridge the consumer divide and connect the unconnected by way of cutting-edge technologies such as Loon,” added Kibati.


The Competition Authority of Kenya (CAK)on Friday, December 13, made a major announcement over the merger deal between telecommunication firms Telkom and Airtel.

Daily Nation was first to report that the move was given a thumbs up.

This comes barely two days since CAK distanced itself from a statement by the Ethics and Anti-Corruption Commission (EACC) that the deal had been put on hold once again.

“The authority shall communicate its determination on the proposed merger as prescribed by Section 46 (6) (a) (ii) of the Competition Act No. 12 of 2010,” the CAK had announced on December 9.

 

The merger has been stopped several times since the two firms announced the plan in January 2019.

 

An appeal was filed with the CAK, challenging the merger and EACC was also probing the move.

 

According to the January agreement, the merged company will be chaired by Telkom CEO, Mugo Kibati while   Airtel Chief Executive, Prasanta Sarma, will be appointed Chief Executive Officer.

 

When speaking about 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.