India’s Bharti Airtel is in talks to buy Telkom Kenya, the East African nation’s smallest telecoms operator, to create a stronger challenger to market leader Safaricom, Reuters reported on Monday.
According to Reuters, London-based Helios Investment, which owns a 60 percent stake in Telkom, is looking to partly cash out of the investment which it entered in 2015.
The move comes after the two companies held merger talks last year, only for them to abandon the plan. Telkom made the approach that time.
“Airtel is in the driving seat. They are leading the talks. Helios is partially cashing out,” a Reuters source said. The deal is expected to be completed by the end of this quarter.
The sector regulator Communications Authority of Kenya said it was yet to be formally notified by the two operators of the latest attempt at a deal.
Telkom Kenya was previously a part of the Kenya Posts and TelecommunicationsCorporation (KPTC) which was the sole provider of both postal and telecommunications services. The company was established as a telecommunications operator in April 1999, after the split of KPTC into the Communications Commission of Kenya(CCK), the Postal Corporation of Kenya (POSTA) and Telkom Kenya.
According to data from the communication regulator tabulated in 2018 , Airtel Networks Limited gained 0.9 percentage points to post a market share of 22.3 percent while Telkom Kenya commands 9.0 per cent of Kenya’s market share. The two firms are the second and third largest telecommunications firm in the country with only Safaricom commanding a greater percent of the market share at 64.2 per cent. Should the merger succeed, it is predicted that the two telcos will have sufficient resources to compete with Safaricom.