Regulator Approves Airtel-Telkom Merger

The Competition Authority of Kenya (CAK) has given the thumbs up for the proposed merger of giant telcos Airtel and Telkom giving a major boost to the two giant operators looking to gazump dominant industry player Safaricom after years of playing second fiddle.

On Friday, the CAK brought to end speculation after approving the marriage between the two entities but explicitly laid down a raft of conditions that the two must adhere to for the merger to be completed.

The new entity which shall be known as Airtel-Telkom has been directed to maintain at least 349 of its existing 674 employees.

CAK Director-General Wang’ombe Kariuki says that 120 employees must be retained by the merged entity for a period of two years from the date of the implementation of the merger.

The new entity has also been instructed to ensure that 114 employees are kept by Telkom for a period of two years from the date of the implementation of the merger while another 115 employees must be absorbed by the network partners of the merged entity.

The regulator has also instructed the new entity to honour all of its government contracts.

Conversely, Airtel& Telkom has also been directed not to sell or transfer their operating and frequency spectrum licenses within the remaining duration of their licenses.

“If the merged entity operating license expires, the 900MHZ and 1800Mhz spectrum acquired from Telkom shall revert back to the government,” reads the condition.

The merged entity is restricted from entering into any form of sale agreement within the next five years.

In addition, Airtel-Telkom shall only access the 4,204km of fiber managed by Telkom on behalf of GoK at the current market rates and no preferential rates shall be accorded to them unless provided for in existing contracts.

The merged entity shall not enjoy any preferential access to use capacity on the 4.204km of fibre managed by Telkom on behalf of the Government.

Directors of the merged entity will also be required to furnish the regulator with annual reports on its compliance with these conditions.

See Also: Airtel Reaches Deal to Merge With Telkom