Airtel and Telkom Kenya have won their appeal against merger conditions imposed by the Competition Authority Kenya (CAK), reports the Citizen. In its ruling made on 04 May, the Competition Tribunal overturned the majority of the conditions placed upon the two units when the CAK approved their merger on 13 December 2019. The tribunal has lifted the prohibition barring the merged entity from entering into commercial agreements within the first five years, including sale agreements, but limits the entity from being taken over or from floating more than 40 percent of its shares.
The previous conditions would have set a backstop, limiting the merged entity from advancing on market leader Safaricom, which had made demands to the Communications Authority of Kenya (CA), including the immediate clearance of KES 1.3 billion in debt accrued, and a rebalancing of frequency allocations.
The two companies have now been allowed to keep their existing network licences in accordance with conditions imposed by the CA, including the 900 MHz and 1800 MHz spectrum owned by Telkom.
The pair has been allowed to negotiate terms of access relating to the 4,204 kilometres of fibre managed by Telkom on behalf of the government of Kenya.
The tribunal has allowed the merged entity to provide the Competition Authority with an annual compliance report on merger conditions for up to two years, deleting the previous open-ended clause. However, the tribunal has retained conditions requiring the merged entity to retain at least 349 of its 674 employees over the next two years, while absorbing 115 of the staff into the new firm.
