Unpacking The Spectrum Question in the Airtel-Telkom Merger

They say, when it rains, it pours. You cannot stop an elephant from delivering a calf if the time is due.

They say change is a force. Change is inevitable and constant. You cannot resist change. With the change, you either embrace it or sit there and let it sweep you along.

In most cases, change is resisted but a good leader doesn’t take his or her people through the process of change because they want to but because he or she knows that they must go through it for their good.

In the business world, mergers are one of the greatest changes. In most cases, business competitors often shake with fright whenever there is a merger between their competitor and another player.

A merger brings together two entities that agree to work together towards a common goal. A merger is like a force that strengthens and in business, towards making the services better for the consumer.

A lot has been said about the merger between Airtel and Telkom. So far, all that has been said by various media channels are just innuendos and unfounded truths that have no roots to hold any water in the face of a challenge.

For those who might not be aware, telecommunications companies work based on spectrums. Spectrums are to telecommunications companies as waves are for radio stations. Now, in the case of Airtel-Telkom merger, the Spectrums just became stronger than or equal to the perceived major player in the sector.

Also Read:

• If the Airtel-Telkom Merger Means Well For Consumers, Why Object It?
• Airtel-Telkom Merger is Critical for the Kenyan Telco Consumer

In this piece, I will use Safaricom as a case study because there is no doubt, Safaricom is a major player and a key shareholder in Kenya’s telecommunications sector.

On the Spectrum of 900 (2G) for instance, Safaricom controls 17.5. Airtel and Telkom Kenya control 10 and 7.5 each. In the merger, Airtel-Telkom with will have a combined force of 17.5, same as Safaricom.

On the 1800 (2G) Spectrum, Safaricom enjoys 30 while Airtel and Telkom have 10 each. In the merger, Airtel-Telkom will have 20, only 10 less than Safaricom. Note that from Safaricom’s 30, 20 was obtained from Bell Western(10) and Essar (10).

Within the 2100 (3G) Spectrum, Safaricom currently has 20 while Airtel and Telkom have 10 each. After the bond, the two (Airtel and Telkom) will have 20, the same as Safaricom.

The 800 (4G) Spectrum makes things interesting because currently, Safaricom has 10 while both Airtel and Telkom have 20 overall. In total, Safaricom will have a combined Spectrum of 77.5. The merged Airtel-Telkom entity will also have the same 77.5.

The image below shows the share of the spectrum:

Numbers don’t lie. Equal spectrum brings a leveled ground in terms of network expansion and service delivery. With the merger, Kenya will now have two major players standing on the same leveled ground with the customer standing to benefit.

Currently, both players (Safaricom and Airtel-Telkom) have enough Spectrum that gives them room to expand their network and serve their customers better. This will see the competition of innovation and service delivery to woo the customers.

Without adequate Spectrum, players in the telecommunications sector cannot be able to roll out networks and offer quality services. Spectrum plays a major and specific role in network roll out as it leads to quality services.

According to Communications Authority (CA), there is still more Spectrum that can be purchased by either of the players in the event one feels wants to gain leverage against the other.