Telkom accuses Safaricom of sabotage in quest to merge with Airtel


Telkom accuses Safaricom of sabotage in quest to merge with Airtel
Telkom Kenya CEO Mugo Kibati. PHOTO | FILE

In Summary

  • Telkom CEO Mugo Kibati stepped into the glare of cameras on Tuesday, laying bare his perceived disgruntlement in the market leader in a strongly-worded press statement.

Telkom has blamed rival Safaricom over its delayed receipt of requisite approvals from the Communications Authority (CA) in its quest to merge operations with Airtel Kenya.

Telkom Chief Executive Officer Mugo Kibati stepped into the glare of cameras on Tuesday, laying bare his perceived disgruntlement in the market leader in a strongly-worded press statement.

“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 said.

“Does the dominant player not want to see the sector grow? Is the dominant player wary of competition, and even more precisely, wary of competitive pricing, choice and value for money for the customer?”

According to Kibati, the continued stay of approval to the merging of the firm’s mobile, enterprise and carrier business with that of Airtel threatens to drive the country’s telecommunications sector into the darkness of monopolization defined largely in price dictation.

Further, the operator who has since pegged its hope for survival and that of a thriving industry on the fruition of the deal says a single market player will kill off innovation in the sector while putting a stranglehold on the consumer’s choice.

Supremacy

While Telkom has stuck at Safaricom’s dominance over the telco landscape in the country, the market leader has shrugged off the suggested supremacy on its part while expecting the deal to provide a paradigm shift from the earlier connotations on dominance.

“We don’t expect the study on competition in the sector to be used to cure a problem which was there three or four years ago. If our two-competitors merge, it changes the entire market structure dynamics which would hence necessitate a new study on competition,” Safaricom’s Director for Corporate affairs told a news conference on August 30.

Even so, the operator has disclosed it holds reservations to the deal which it would love to see sorted out before the regulator’s seal of approval to the transaction.

While Safaricom failed to divulge further on their discontentment, the CA has highlighted the market leader’s submission including debts owed to it by the merging parties and the operators fear on competition in addition to a self proposal on the re-balancing of the operators spectrum allocation.

“Please note that the Authority is reviewing the request for interpretation and is not therefore able to release a summary at this point.  The Authority shall be responding to Safaricom appropriately after review,” noted CA’s reply to Citizen Digital queries on mail.

An Ethics and Anti-Corruption Commission probe of Telkom’s past transactions further stands as an additional road block to Telkom’s operations merger with Airtel.

While Safaricom sticks at the apex of the telco sector, the soon-to-be pairing competitors have been eating into the market leader’s share under an aggressive customer recruitment drive.

Telkom recently saw its number of mobile subscriptions slide by 8.9 percent between January and March this year as Airtel raised the bar to capture a further 15.2 percent of subscriptions over the period.

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Story By Kepha Muiruri
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