Kenya: Airtel And Telkom To Contest Regulator’s Merger Terms - Reports

14 February 2020

Mergers, Acquisitions and Financial Results

In December last year, the Competition Authority of Kenya (CAK) approved the merger of the second and third largest telcos in Kenya, Telkom Kenya and Airtel Kenya. Between them, the two operators currently control approximately 30% of the Kenyan market, with over 14 million subscribers.


However, the conditions imposed by CAK on the merger were strict, with the regulator seeking to ensure that the newly merged Airtel–Telkom would retain 50% of its staff for at least two years.


Additional conditions said that the new entity would be barred from participating in any new sale deal over the next five years and would not be allowed to buy or sell spectrum licences until their duration expires. They have also been ordered to return the Telkom-owned spectrum to the government when its licence expires.


Two months after CAK’s decision, the two operators are set to contest all of these critical terms, specifically seeking to decrease the staff retention clause to just one year, get rid of the five-year sales restriction, and also be given the right to bill the government at market rates for access to state-owned national optic fibre infrastructure, for which Telkom currently receives special access due to its robust support of government infrastructure.


A number of Kenya’s telecoms stakeholders have objected to this merger, including some of Telkom’s former employees, who are embroiled in a legal battle with the company.

Source: Total Tel