As the year 2019 snails to the end, in the world of business, it goes down as the year of mergers. For those with an interest in business, you may have realized that many businesses have decided to merge to operate as single entities this year.
Mergers are important in the world of business. This is where two businesses that offer similar or related products and services come together and decide to operate as one to better their services and products to their customers.
The truth is, the future of Kenya’s business environment will be shaped and determined by mergers. With the prevailing business environment, independent businesses are finding it hard to survive, thus, it is only through mergers that they can survive.
One of the mergers that have dominated the Kenyan airwaves is that between Airtel and Telkom Kenya which is set to culminate into forming Airtel-Telkom. The merger between Airtel and Telkom Kenya is no longer an idea. It is a reality. It is happening. The Competition Authority of Kenya (CAK) has already given its blessing for the process to proceed.
From the telecommunications point of view, the merger between these two players is going to shift the ground in the telecommunications sector in Kenya. Of course, there is Safaricom PLC that has often been thought of as the undisputed telecommunications giant. Methinks the coming of Airtel-Telkom is going to create another worthy force in terms of services and products, hence giving customers more freedom of choosing their service providers.
Among the services that Kenyans want from Kenyan telecommunications companies include making calls (voice data), data bundles, and sending and receiving messages (SMS). With an internet penetration of 89.7 percent, it is evident that Kenyans are increasingly embracing technology and in need of better services.
Talking of better services, for the better part of last week, there was a Telkom network outage in various parts, Nairobi included. During this time, some customers were unable to make calls, browse or send texts. This was not a unique incident tied to Telkom alone though. There have been cases where other service providers had major network outages too.
The Communications Authority issued a statement on the outage calling on Telkom Kenya to “quickly address a commercial dispute with Eaton Towers Kenya Limited that saw the latter switch off Telkom Kenya transmitters, resulting in service outage to Telkom Kenya customers.”
We reached out to Telkom Kenya on the issue. There was indeed a network outage that was as a result of debt accumulation to the tune of 255.6 million shillings owed to Eaton Towers Kenya Limited.
During mergers, roles often change including signatories and processes of approval and this might sometime delay or prolong payments. Debt accumulation is not a unique thing in the world of mergers though. Debt accumulation, however, has an impact on any given merger as it prolongs the process of merging and acquisition because most of the time, budgets are projected to a subjected timeline.
The “year of the mergers” is coming to an end. How will 2020 be? Already Telkom Kenya has promised more goodies to customers upon the completion of the merger with Airtel. Time tells it all. Time will tell.