A Telkom Kenya shop near the company's headquarters in Nairobi, Kenya. FILE PHOTO
Telkom Kenya has accused market leader Safaricom and the Ethics
and Anti-Corruption Commission (EACC) of frustrating its merger plans
with Airtel.
In a rare public spat,
the telco says Safaricom wants to delay the process that seeks provide
customers with more credible options.
CLAIMS
“Does
the dominant player not want to see this sector grow? Is the dominant
player wary of competition, and even more precisely, wary of competitive
pricing, choice and value for money for the consumer?” Telkom Kenya
Chief Executive Officer Mugo Kibati told a press conference on Tuesday.
Safaricom
interim CEO Michael Joseph said on Friday that the firm had written a
letter to the market regulator raising some of its concerns that it
wants looked into before approving the merger.
“On
Friday, August 30, 2019, Safaricom informed the media that it had
written to the Communications Authority, to urge the industry regulator
not to approve the intended merger of businesses, as it had concerns
that it wanted addressed first,” Kibati said.
This move appears not to sit well with Telkom, which now sees it calculated to sabotage the merger.
“The
intended merger of some of our businesses with Airtel, will result in
the formation of an entity with enhanced scale that will enable Kenya’s
sector have one last stab at a competitive environment, despite the
tough forces at play,” Kibati said.
“We
have no quarrel at all with our colleagues at Safaricom, we are simply
trying to restructure and improve our own business and for the good of
the industry. It is unfortunate, however, that Safaricom now wants to
delay this process that seeks provide customers with more credible
options,” Kibati added.
Safaricom is yet to respond to these allegations.
On
EACC, Telkom says it has given the ethics commission all the
information they have requested and will continue to cooperate on the
matter up until a substantive conclusion is reached.
“I
need to reiterate that the current Transaction between Telkom and
Airtel is still an ongoing process, but one that has so far followed due
legal and regulatory processes,” Kibati said.
EACC
in investigating allegations of misappropriation of Public funds in the
process of the recapitalization and restructuring of the balance sheet
of Telkom Kenya in 2012.
“This
investigation now impacts the progress of the intended Transaction, as
the requisite regulatory bodies have since put a pause on the approval
process,” Telkom added.
Telkom is
counting on the merger plans with Airtel, which will create an entity
known as Airtel-Telkom, to take on Safaricom and end its loss-making
streak.
It has also announced that it plans to fire 575 staff in the process, and ask them to reapply to the new outfit.
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