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Safaricom says Telkom and Airtel Kenya owe it close to Sh1.3 billion

On Tuesday, Telkom Kenya accused Safaricom of having a hand in the delayed merger with Airtel Kenya

In Summary
  • Debt is due and payable, based on the agreement to provide services entered into with the two entities as distinct operators
Michael Joseph
Michael Joseph

Safaricom Plc has refuted claims that it is opposed to the planned merger between rivals Airtel Kenya and Telkom. 

In a statement, chief executive officer Michael Joseph however acknowledged that there are outstanding issues that Safaricom want addressed by the Communication Authority before the merger.

'Our attention has been drawn to claims by Telkom Kenya that Safaricom is opposed to its proposed merger with Airtel Kenya. We wish to clarify that this is not Safaricom’s position,’’ the telco said in a statement to media.

On Tuesday, Telkom Kenya accused Safaricom of having a hand in the delayed merger.

The company’s chief executive Mugo Kibati told journalist Safaricom is sabotaging its awaited final approval to conclude the transaction, afraid of competition from the combined entity.

Yesterday, Joseph said that while Safaricom is supportive of industry changes that would offer greater choice and value to consumers, it has valid concerns that it hopes CA will consider and address prior to the merger approval.

The first is the debt owed by the two operators, amounting to Sh1.29 billion, incurred for the provision of various services including interconnection, co-location and fibre services.

The country’s leading network provider with over 65 per cent of subscribers also wants CA to rebalance the frequencies allocation.

According to Safaricom, post-merger, Airtel-Telkom will jointly hold 77.5 MHz of spectrum against a customer base of 17.3 million, compared to Safaricom’s 57.5 MHz with almost double the customer base at 31.8 million.

 

‘’Given the size of Safaricom’s customer base in comparison to the current spectrum holdings, it is apparent that the transaction will create a disproportionate imbalance in the spectrum allocation, which will be inconsistent with the market share,’’ Joseph said.

Safaricom also wants CA to treat operators equally, specifically in relation to licensing and operations requirements.

‘’Having articulated our concerns, we await direction from the regulator on the way forward, especially in regard to the debt payment and rebalancing of frequencies allocation,’’ Joseph said.

The merger between Telkom and Airtel was announced on February 8 with the firms intending to combine their respective mobile, enterprise and carrier services businesses and form an entity, Airtel-Telkom.

Ethics and Anti Corruption Authority has since stopped the merger, saying it is  investigating whether public funds were lost when the Cabinet approved a plan in 2012 to convert the Treasury’s loans in Telkom Kenya into equity as part of a plan to recapitalise and restructure the balance sheet of the company.