Telkom Kenya has downplayed allegations that it owes rival telco Safaricom Ksh. 906.6 million debt ahead of its planned merger with Airtel.
Despite confirming that it actually owes Safaricom an undisclosed amount of money, Telkom –in a news report by the Business Daily – insisted that the quoted sum of Ksh. 906.6 million had been bloated by the rival telco.
“The amounts being reconciled by our teams are less than the figures quoted by Safaricom in the media; Safaricom figures are incorrect and we will be engaging with them,” Telkom Kenya said in a statement according to the Business Daily.
A fortnight ago, Safaricom wrote to the Communication Authority of Kenya (CA) seeking the body’s intervention to ensure that rival network service providers Telkom and Airtel pay back a combined Ksh. 1.2 billion debt to the telco ahead of the two firms’ planned merger.
According to Safaricom interim Chief Executive Officer (CEO) Michael Joseph, Telkom Kenya owes the telco the aforementioned amount while Airtel Kenya owes the telco Ksh. 390.7 million in arrears after the two firms outsourced interconnection, co-location and fibre services from Safaricom. Mr. Joseph continued on to say that since Airtel declared that it will not take up Telkom’s liabilities once the merger is successful, tracking the Ksh. 1.2 billion debt will prove problematic moving forward.
With the aforementioned in mind, Telkom, in its statement, similarly said that the planned merger would not affect its ability to pay back debt.
“The intended transaction between Telkom and Airtel will not in any way affect or impact the payment of Safaricom debt,” said the Telkom Kenya statement.
According to the Business Daily, Telkom reckons that the move by Safaricom is meant to stall the planned merger which will culminate in the establishment of a single joint venture operating under the name Airtel-Telkom. The merger, which will combine the assets of the two telcos, is seen as a way to counter Safaricom’s dominance of the local network service provision industry. Safaricom currently controls 65 percent of the local mobile telephony market share.