As Airtel Africa prepares for its IPO, one of its units in kenya is rumored to merge with rival, Telkom Kenya. Both are playing catch up to the dominant Safaricom but as of last year, they managed to reduce its market share as they both saw market gains while Safaricom’s dropped.
All this comes amid visits by Bharti Airtel’s chairman Sunil Mittal to Kenya and he is said to have held talks on the same with Telkom Kenya’s board. Earlier last year it was rumored that Telkom was in talks to acquire Airtel Kenya but revelations from the above meetings seems to suggest the opposite. Airtel instead might control Telkom.
It should be noted that Airtel also in the same year was rumored to sell off some of its its East African units in markets where they were not leading or in the second spot and on the same note, they would also pursue other avenues like intra-country sales, mergers or acquisitions to assume the former.
This is already evident in Rwanda where they merged with rival Tigo and now these developments in Kenya seem to suggest they’re about to take up the now resurgent Telkom.
It is said that Airtel will control 50% of the new entity with Helios (Telkom) retaining 40% while the Kenyan government will have 10% stake.
The combined Airtel and Telkom market share is 31.3% against Safaricom’s 64.3%. This has so far been achieved after aggressive growth tactics that have somewhat put a dent in Safaricom’s share of the Kenyan telecom market..
If the rumors prove true, we can only wait for Kenyan authorities to give it a green light or otherwise given the two already submitted a plea that have Safaricom declared dominant in a bid to have some of its grip on the Kenyan market reduced.This however proved futile.
