Airtel Kenya and Telkom Kenya have announced that they have dropped the much-publicized merger talks, which have been taking place for some. This may come as a relief to the industry leader Safaricom that opposed it and saw it as a threat to its dominance in the Kenyan Market.
While releasing the joint statement, the Telcos said, “After carefully reviewing the available options, Telkom has opted to adopt an alternative strategic direction and will no longer be pursuing the proposed joint venture transaction. This decision has been mutually agreed with Airtel Networks Kenya Limited.”
“Our confidence in Telkom’s new direction is further bolstered by the accelerated digital transformation brought about by the recent dynamics of the COVID-19 pandemic, which has made both businesses as well individuals, acutely aware of the need to review direction, with respect to how we do things, and the need to step-up. This accelerated digital transformation is particularly important within the telecommunications sector, owing to an increased demand for data and broadband,” said Telkom Kenya in a statement.
Telkom said that they have seen new opportunities brought in by the Covid-19 pandemic and as such, they are looking at these opportunities to expand their operations.
Telkom Kenya says that the merger plans were made difficult by the fact that documentation needed for approvals was not forthcoming.
Following this development, the redundancy notice issued by issued by the company on 31st July 2019 has been withdrawn with immediate effect and the earlier envisaged redundancies no longer apply. At least 220 employees who were staring at job losses have been given a lifeline.
The competition Authority of Kenya had approved the merger in December 2019 after some initial challenges to the merger. Among the initial hiccups was investigation by the EACC.
Telkom Kenya now says that it is focusing on strengthening its infrastructure asset base and services as it seeks to cement its position in the digital space.
Should the merger have succeed, it would have left hundreds with job loses even as the COVID-19 continues to ravage the country. The merger would also have brought up a Telco that would take on Safaricom’s dominance of the Kenya market.
