Airtel, Telkom oppose CAK merger conditions

Telkom-Airtel Merger

Network service providers Airtel and Telkom Kenya are opposing conditions set by the Competition Authority of Kenya (CAK) ahead of their planned merger.

The two telcos have filed an application with the Competition Tribunal to review the conditions set by CAK on December 13, 2019. Back then the CAK instructed the merged entity to retain at least 349 of the 674 employees for two years from the date of the implementation of the merger.

 “The Competition Tribunal invites interested parties to make submissions/proposals/comments to the Tribunal in regard to the application for review within the next 30 days,” chairperson for the tribunal Stephen Kipkenda said in a Kenya Gazette notice

CAK had similarly instructed the two parties to refrain from selling the company for at least five years. Airtel and Telkom on the other hand want the directive to be abandoned completely.

“The merged entity, or part of it, is restricted from entering into any form of sale agreement within the next five years,” said the CAK in a notice detailing the merger conditions last December.

Another condition that the CAK set similarly barred the telcos from selling four frequency spectrum licences and five operating licences including a submarine cable landing licence, owned by the two telcos.

According to experts, the move by Telkom and Airtel signals hints that the two telcos are aiming to use the planned merger as a medium that will allow them to venture into other financial transactions after the merger.

Last year, Telkom Kenya Chief Executive Mugo Kibati insisted that all laid off employees would be catered for and despite the company’s restructuring exercise, some of the laid off employees could end up getting jobs at the new Airtel-Telkom entity. Airtel and Telkom also argued that they needed to secure more telecoms frequencies to better compete with the market leader, Safaricom.

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