Airtel Kenya’s potential acquisition of rival operator Telkom Kenya has come even closer with the news that the Competition Authority of Kenya (CAK) has approved the move. The new company is expected to be known as Airtel-Telkom.
Among conditions set out in an official government publication, CAK director general Wang’ombe Kariuki noted that Airtel Kenya cannot sell the merged entity for the next five years and must fulfil all existing contracts with government entities. Given the unwelcome (for the government) likelihood of redundancies (Telkom Kenya had suggested close to 600), Telkom Kenya will also be required to retain some 349 existing employees (just over half of the overall total) after the acquisition, some for a specified period and some to be absorbed by network partners.
While this merger, announced in February, is expected to strengthen competition against market leader Safaricom, even the combined companies will still have just over half the estimated 32 million connections boasted by the country’s leading operator.
The merger of the second and third-largest operators in Kenya now has to face an investigation by the Ethics and Anti-Corruption Commission, which may not be a formality after complaints about the deal from a committee in Kenya’s National Assembly. Nevertheless, the acquisition is much closer to reality after the CAK decision.