Airtel – Telkom merger

The anticipated merger between Airtel and Telkom has been viewed by many as a way to level up the telecommunications sector. However this could also result to price wars with Safaricom in that the two are likely to attract a larger customer base through lowering of prices.
Safaricom acted in time by putting some bumps on the road by demanding debts owed by the two entities and a level playground for the spectrum, one of the key assets in the telecommunications sector. With the merger this would mean that Airtel and Telkom would have more spectrum compared to Safaricom.
Telecommunications companies have been lobbying legislators to come up with regulations that will dictate that no telecommunication firm should have more than 50% market share be declared dominant, in a bid to allow growth of smaller players. Communications Authority of Kenya CA indicates that Safaricom has 74.5% agents totaling to 162,800.
Airtel is Kenya’s most rebranded network, it started out as KenCell when it entered the Kenyan market in 2000, rebranded to Celtel Kenya in 2004 then to Zain in 2008 and later to Airtel in 2010.
In addition to rebranding, Airtel Networks Kenya had reported a loss of Ksh3.8B in 2017. Its liabilities were Ksh 39.9B exceeding its assets that stood at Ksh17B. On the brighter side in 2018 Airtel managed to cut down on its operating cost by 9.2% while managing to epand its margins from 24% to 33.4%.
The merger would have seen the two challenge M-Pesa dominance in the market as well as increase completion thus consumers could benefit from cheaper services.

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