Telkom takes Safaricom head-on over opposition to merger with Airtel

Telkom-Kenya CEO Mugo Kibati (PHOTO: Standard)

Telkom Kenya has taken on Safaricom over opposition to allowing its merger with Airtel-Kenya

At a news conference on Tuesday, Telkom-Kenya Managing Director Mugo Kibati said Safaricom on August 31 wrote to the Communications Authority of Kenya (CA) not to approve the merger over concerns it wants to address.

“We have no problem with our colleagues at Safaricom, what they should probably know is that we are just trying to restructure our business,” said Kibati. “It is unfortunate that Safaricom wants to revise deal that will offer consumers credible options, does Safaricom don’t want to see the sector grow, are they wary of competition and even more precisely wary of choice, competitive pricing and value for money for the consumer,”

He noted that in a stunted market, which will be a result of the deal, not progressing competitive pricing does not exist due to the existence of single play, the choice also lacks and innovation inertia thrives.

“In a stunted market the sector would grow and this will roll back Kenya’s leading role in technology across the region,” he said.

“The merger will create a vibrant telecommunication industry offering consumers better choices and value for their money,” he said.

Airtel said in February its Airtel Networks Kenya unit had agreed to buy Telkom Kenya, in which the state still holds 40 per cent after a majority stake was sold in 2007.

The combined entity would create a stronger challenger to Safaricom, which now controls almost two-thirds of the market in terms of subscribers.

The Airtel-Telkom merger is also facing another challenge from the Ethics Anti-Corruption Commission probe over alleged crimes committed in 2012.

The allegations involve misappropriation of public funds.

Last week, Mugo Kibati told KTN that he is optimistic the deal will sail through before the end of the year despite the investigations.

The Chief Executive said the ongoing probe has nothing to do with the deal saying the merger is likely to materialise before the end of the year and not end of August as earlier reported.

“We welcome the current investigations and willing to cooperate with the Ethics and Anti-Corruption Commission. I would also like to state that none of our managers to the best of my knowledge is being investigated,” he said.

“The investigation stems from a parliamentary report done several years ago but it is about the EACC to do their work and let the truth come out,” he added.

Asked whether the probe is likely to delay the ongoing merger talks, Mugo said it has nothing to do with the planned merger.

He, however, called on the investigators to consider the impact the merger will have on the new business. He says the merger will help revive Telkom making it more competitive and offers a new lease of life to staff careers.