This past Friday, Kenyan telcos Airtel and Telkom announced their signing of a binding agreement that sees the two companies merge their mobile, enterprise, and carrier services to form a single joint venture company; Airtel-Telkom.
A statement said that as per the deal, Telkom Kenya’s real estate portfolio and specific government services will be excluded from being part of the newly-formed combined entity. “The final shareholding will be determined at the closing of the transaction. Telkom Kenya has the option of holding up to 49 per cent of that shareholding,” they said.
Telkom Kenya CEO, Mugo Kibati, will chair the merged company, while Airtel Kenya CEO Prasanta Sarma, will be appointed its CEO, they added.
Together, the new teleco can boast 14.6 million mobile subscribers, still barely half of Safaricom’s 29.94 million as September 2018.
The statement said that both telcos will continue with their operations as usual, as there will be no immediate changes; neither in operations nor leadership, as well as in legal, organisational and staffing structures.
In addition to this, both brands and their respective products and solutions, will continue to co-exist.
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“As per the agreement, both the partners will combine their operations in Kenya and establish an entity with enhanced scale and efficiency, larger distribution network and strategic brand presence, thereby enhancing the range and quality of products and service offerings in the market, and greater choice and convenience to the consumer,” said the firms.
Treasury Secretary Henry Rotich noted, “This move is well aligned with the government’s agenda to optimise the value of the assets that it holds in trust, on behalf of Kenyans, while cementing the country’s position not only as a regional business hub but also as an international investment magnet.”