Airtel set to buyout Telkom: Airtel Kenya has revived talks with Telkom Kenya for a possible merger or buyout.
This has been revealed by a report by Reuters. If the buyout goes through, the duo will create a stronger telecommunications unit that will be better placed to compete with Safaricom.
“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,” says Telkom Kenya Chief Executive Officer Mugo Kibati.
London-based Helios Investment, which owns a 60 per cent stake in Telkom, is looking to partly cash out of the investment which it entered in 2015. This deal is expected to be sealed by March 2020.
A subsequent report in the Business Daily says that should the latest deal go through, it will see Kenya’s second and third-largest telecom operators command 14.6 million mobile subscribers, being 48.76 per cent of Safaricom’s 29.94 million as at end of September 2018.
“In local voice market, Safaricom accounted for 8.93 billion minutes while Airtel and Telkom had 4.78 billion minutes and 619.4 million minutes. A merger will see the two have 5.6 billion minutes. Focus is also on the CA’s much awaited dominance report, which could also have far reaching impact on how the industry shapes up going forward,” says the report.
Sector players are still waiting to know whether or not CA will declare Safaricom a dominant player as had been recommended in the draft report by Analysys Mason, the UK firm that was contracted to evaluate competitiveness in the sector.
The report had also recommended that Safaricom stops on-net discounts and individually tailored loyalty schemes and also share its infrastructure with other networks to reduce barriers to entry.
