Telkom Kenya and Airtel Kenya have abandoned their proposed merger, after the companies were unable to secure regulatory approval under satisfactory conditions. The deal, first announced in February 2019, was aimed at helping the two operators challenge Kenyan market leader Safaricom.
In a statement, Telkom Kenya CEO Mugo Kibati said the plan had faced challenges in getting approval and that this forced the firm to seek alternative strategic options. Kibati said confidence in a new direction was further bolstered by the accelerated digital transformation brought about by the recent dynamics of the Covid-19 pandemic, including increased demand for data and broadband.
Airtel Africa CEO Raghunath Mandava noted that Kenya was a large and growing market and that the company remains committed to building a growing profitable business. "We currently serve more than 14 million Kenyan customers, a number that is growing month on month, and in the last quarter our revenue numbers were up double digit in constant currency in Kenya. Our strategy to focus on winning more customers, invest in a best in class voice and data network and progressively expand our mobile money business, will continue to build on these results in order to deliver against the opportunities the Kenyan market has to offer,” Mandava said.
According to the latest data from the Communications Authority of Kenya, Safaricom controls nearly 65 percent of Kenya’s mobile subscriptions, while Airtel Kenya has a 26.6 percent market share, and Telkom holds 5.8 percent.
The deal, whose terms have never been disclosed, would have created a stronger challenger for the industry leader, but reduced the Kenyan market to only two network operators. While competition authorities approved the merger last December, the decision included numerous conditions restricting the operators' ability to combine activities. An appeal against the conditions resulted in some relief, but the companies said they were still not able to satisfy all the conditions agreed to complete the merger.
