In the wake of the recently released Analysis Mason report and Safaricom PLC dominance, Telkom Kenya plans to merge its operations with Bharti’s Airtel in a bid to form a telco enterprise that will take on market leader head-on.
The two companies are seeking to combine forces and function as a single entity as opposed to waiting for Safaricom to drive them out of business. This comes at a time when the two telecommunication companies have been accumulating losses.
According to statistics, Safaricom dominates the market with more than 70 percent market share, which is way more than the share enjoyed by the two companies. The Communications Authority of Kenya (CA) has been made aware of the possibility of the mergers and will be informed once the deal is sealed.
The actual details are still vague but if the deal is done, an official announcement could be made as soon as the second week of April 2018. If it comes to pass, the deal could see the two become one entity when one of them has failed in their strategies to spring out of the inevitable losses realized.
According to an unconfirmed source, a second meeting is expected with the CA, where an in-depth detailing will be done. It further reiterates that if the deal comes to fruition, the two firms will combine their assets, reduce variable costs like staff, usable and distribution channels, and marketing, among others.
Mergers, to an extent, are advantageous as it allows two or more companies to combine forces and work towards achieving a goal while still upholding their exclusive identities.
Compared to Airtel, Telkom Kenya enjoys a substantial existence in the data market. With the recent launch of its mobile financial solution T-Kash, the move coincides with the decision of mobile interoperability, which permits consumers to carry out mobile money transactions across the three networks without any limitations.
Notably, Airtel is the second biggest player in mobile customer numbers. A harmonized synergy will certainly provide a better and appealing mobile package. As soon as the deal is put to paper, the merger will become the second most preferred network.
The move, like any other deal, is faced with a fair share of skepticism. Even with the merger, the two companies will still have fewer subscribers compared to Safaricom, which boasts 29.4 million subscribers. Nevertheless, the decision will allow the two