Airtel goes cold on Telkom Kenya merger

Merger is off after the two opertors could not agree on a number of issues
Bharti Airtel walks away from deal with Telkom Kenya.
Bharti Airtel walks away from deal with Telkom Kenya.

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Bharti Airtel has abandoned talks to merge its Kenya unit with rival Telkom Kenya after the two disagreed on several issues including future investment plans, according to a report by Reuters.

Talks between the pair started in April, when reports suggested initial discussions on combining selected operations would be a precursor to Airtel launching a full takeover bid. However, Airtel reportedly walked away from any potential deal, which would have created an operator thought to be better equipped to compete with dominant provider Safaricom. Although increased competition is a goal the country’s authorities are keen to achieve, it is unclear if reducing the number of operators in the market would have been an acceptable way to meet it.

GSMA Intelligence connection figures for Q1 2018 (including cellular IoT) show Airtel held an 18% share, Telkom Kenya 9%, while Safaricom held a huge lead with 72%. The only other mobile operator – Faiba – entered the market in December 2017 with a 4G tariff to complement parent Jamii Telecom’s fixed offering. Its connection share was around one per cent at the end of Q1.

Competition issues
Perceived lack of competition in the communications market has attracted fierce criticism from Kenyan politicians and industry rivals angry about the strong position held by Safaricom in both mobile and financial services, according to Reuters.

Although some figures, and an independent investigation into the market, initially suggested Safaricom should split in two the Communications Authority of Kenya dismissed the idea. Some concessions have been made by Safaricom on opening up Kenya’s mobile money platforms, but authorities remain keen on stronger measures. The upcoming publication of the full competition report into the sector could provide some clues on how the government plans to achieve this.

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