Safaricom CEO clarifies stance on Airtel-Telkom merger

Safaricom CEO clarifies stance on Airtel-Telkom merger

Safaricom’s interim CEO Michael Joseph has dismissed rumours that the company objects to an upcoming merger between its domestic rivals Airtel Kenya and Telkom Kenya.

His comments were made the day after Telkom Kenya chief Mugo Kibati alleged that Safaricom had pressured the regulator to block the deal, which was agreed in February this year. Joseph claimed that Safaricom had no objections to the proposal but called for caution from the country’s regulator over the ramifications of such a deal.

Between them, Airtel Kenya and Telkom Kenya owe Safaricom KES1.3 billion ($12.5 million) through separate agreements related to co-location and interconnection services. “Our expectation is that the payment obligations should be settled in full before the transfer of business is effected,” noted Joseph.

He added that if the merger goes ahead, the resulting entity would “jointly hold 77.5MHz of spectrum against a customer base of 17.3 million, compared to Safaricom’s 57.5MHz” for a customer base of around 31.8 million, and called on the regulator to ensure that this discrepancy would be addressed as a condition for clearing the deal.

Joseph acknowledged that these two issues were of the most concern to Safaricom, but added that the regulator must consider “equal treatment of operators and creation of a level playing field…specifically in relation to licensing and operations requirements.”

His comments could be a veiled critique of attempts by Kenya’s authorities to force Safaricom to spin off its m-Pesa mobile payments offering into a new unit separate from its communications business.

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