Two weeks ago, we told you of a potential merger between two of Kenya’s striving telecom service providers – Airtel and Telkom. Both companies, in a bid to catch up with Safaricom, managed to gain a chunk of the country’s market share last year amidst Safaricom’s drop in the numbers.
The rumours have been proven to be true, and the marriage is now on.
Bharti Airtel has confirmed that its subsidiary firm, Airtel Kenya has penned an agreement with Telkom Kenya Limited to merge mobile, enterprise and carrier services businesses in the country. The new operation will run under a new ‘Airtel-Telkom’ name.
The agreement defines that the two partners “will combine their operations in Kenya and establish an entity with enhanced scale, operational efficiency and strategic brand presence.”
Airtel says that the finalisation and closure of the transaction is subject to approval by the relevant authorities. What’s to note is that Telkom Kenya has the option of holding up to 49 per cent of that shareholding.
No immediate changes to operations
A statement released emphasizes that Airtel Kenya and Telkom Kenya will not make immediate changes to their operations, and as thus these will continue as usual. It adds that there will also be no change to the current respective leadership and management, legal, organisational and staffing structures.
However, there are reports that Telkom’s current CEO Mugo Kibati will serve as the Chairman of the new-formed entity. On the other hand, Airtel Kenya’s Chief Executive Prasanta Sarma will have his sit bumped up to CEO of Airtel-Telkom.
Kenya’s National Treasury Cabinet Secretary, Henry Rotich, affirmed to the merger saying that it is aligned with the government’s agenda to optimise the value of the assets that it holds in trust, on behalf of Kenyans.
