Telkom Kenya to retain name for ICT unit after Airtel merger

KENYA – Telkom Kenya could still retain its brand name for its ICT business even after the merger with Airtel Kenya, a regulatory notice by the Communication Authority of Kenya (CA) has revealed.

The two telecommunications firms have sought the Authority’s approval to merge their mobile, enterprise and carrier services to form a single joint venture company.

If the deal is approved, Telkom Kenya will transfer its mobile, enterprise and carrier business to Airtel Networks Limited in exchange for a shareholding in Airtel Networks Kenya.

However, Airtel has a larger market share than Telkom’s under 5 million active subscribers, a factor that is viewed to potentially play a critical role in dictating the shareholding power as to which either telco will push for critical decisions.

According to the Authorities Director General, Francis Wangusi, the companies have further indicated that upon approval of the proposed merger, Airtel will thereafter be renamed Airtel-Telkom.

Francis said that “Telkom will continue operating in the ICT sector providing certain other services to select customers,” while hinting at its possible approval of the deal.

Mr Wangusi said in the notice that CA intends to grant approval for the merger, “subject to the parties fulfilling certain conditions.”

According to sources familiar with the development, the CA has also asked any parties opposed to the merger to make their submissions ahead of the intended nod within a month.

Telkom had earlier hived off its fibre network business in the ongoing merger talks to give the government a secure communication system, sources familiar with the transaction had revealed.

It operates the National Optic Fibre Backbone (Nofbi), which provides telecommunications connectivity across the country.

The government of Kenya, which holds a 40 percent stake in Telkom Kenya, is said to have previously ruled out handing control of the strategic asset to a party that it did not have control.

The government cited the sensitivity of communications and State documents it is involved in transmitting-Telkom Kenya’s fibre optic project is funded by the government.

Phase one of the project was completed in 2009 and established a national optic fibre backbone infrastructure which passes through 58 towns in 35 counties across Kenya with 4,300km of cable already laid.

News Reporter

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