Telkom Kenya and Airtel looking to merge to take on giant take on Safaricom

(Reuters) – Telkom Kenya plans to merge operations with Indian-owned Bharti Airtel’s local unit as a first step to acquiring all of Airtel’s assets, sources said on Tuesday, creating a stronger challenger to market leader Safaricom.

Both operators have a combined 23 percent of Kenya’s 41 million mobile subscribers, but have long struggled to compete with Safaricom, which has a 71.9 percent market share.

The disparity is even wider in revenue terms, with Safaricom, enjoying more than 90 percent in both voice and short messages categories.

Data from the Communications Authority (CA) regulator showed Safaricom also has close to 90 percent of the annual revenue from the Internet access business. It also has a commanding lead in mobile phone money transfer with its M-Pesa service, which is regulated by the central bank.

A source at CA said the two firms have been engaging officials over the plan to share outlets and infrastructure like transmission assets, before Telkom acquires Airtel Kenya at an unspecified time.
“They are yet to make a formal application (to the telecoms regulator) disclosing all the details,” the source told reporters.