CONFLICT

Telkom blames Safaricom and EACC over delayed merger with Airtel

Kibati claimed that on August 30, Safaricom informed the media that it had written to the Communications Authority, to urge the industry regulator not to approve the intended merger of businesses

In Summary
  • The transaction which was expected to be finalised before December intended to bring increased competition to the sector.
  • Telkom Kenya was on August 14 requested by EACC to provide further information in connection with investigations on allegations of misappropriation of public funds
Telkom CEO Mugo Kibati.
Telkom CEO Mugo Kibati.
Image: YOUTUBE

Telkom Kenya has accused the Ethics and Anti-Corruption Commission (EACC) and Safaricom Plc of causing delays to its merger with Airtel.

Addressing the media on the status of the merger, Telkom chief executive Mugo Kibati said the move is depriving commercial benefits to consumers and investments in the country as well as pushing for monopolistic competition and leaving 575 laid-off employees in limbo.

Telkom Kenya Limited and Airtel Networks Kenya Limited announced the expected merger on February 8, intending to combine their respective mobile, enterprise and carrier services businesses and form an entity, Airtel-Telkom.

 
 

The transaction which was expected to be finalised before December intended to bring increased competition to the dominant player in the sector, Safaricom which has also been accused of playing in monopoly.

“We are staring at a possibility of a monopoly that leaves consumers with no choice for alternative products as well as investors at a distance to invest in such a market,” Kibati said.

Telkom Kenya was on August 14 requested by EACC to provide further information in connection with investigations on allegations of misappropriation of public funds in the process of the recapitalization and restructuring of the balance sheet in 2012.

“This investigation now impacts the progress of the intended transaction, as the requisite regulatory bodies have since put a pause on the approval process,” Kibati said.

In addition, Kibati claimed that on August 30, Safaricom informed the media that it had written to the Communications Authority, to urge the industry regulator not to approve the intended merger of businesses, as it had concerns that it wanted to be addressed first.

‘We have no quarrel at all with our colleagues at Safaricom, we are simply trying to restructure and improve our own business and for the good of the industry. It is unfortunate, however, that Safaricom now wants to delay this process that seeks to provide customers with more credible options,” he added.

On July 31, Telkom issued a one-month notice of redundancy to its 575 employees, informing them of the intention to terminate the employment in order to facilitate this Transaction.

 
 

Kibati said intended entrenchment is still to engage them in the combined entity following the after recruitment criteria.


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