Safaricom has raised concerns over the Telkom-Airtel merger.
In a statement by acting CEO Michael Joseph, Safaricom said it “believes in competition based on innovation, investment, focus on brand building and service to the customer,” but went on to name three concerns that it is dissatisfied with
“Industry players are free to engage and organize themselves as they please, subject to regulatory approvals, to achieve their objectives… While we are supportive of industry changes that seek to deliver greater choice and value to consumers, we have raised valid concerns that we hope the regulator will consider and address as part of the approval process,” the CEO said.
The first concern is the Sh1.2 billion debt owed by the two operators, incurred for the provision of interconnection, co-location and fibre services. “Our expectation is that the payment obligations should be settled in full before the transfer of business is effected,” the statement said.
“The second is the need to rebalance the frequencies allocation. Post-merger, Airtel-Telkom will jointly hold 77.5 MHz of spectrum against a customer base of 17.3 million, compared to Safaricom’s 57.5 MHz with almost double the customer base at 31.8 million. Given the size of Safaricom’s customer base in comparison to the current spectrum holdings, it is apparent that the transaction will create a disproportionate imbalance in the spectrum allocation, which will be inconsistent with the market share.”
The third issue, Safaricom said, concerns the equal treatment of operators and creation of a level playing field within the industry, specifically in relation to licensing and operations requirements.
Safaricom retaliated that before the merger goes ahead, the regulator should give the way forward, especially in regard to the debt payment and rebalancing of frequencies allocation.
On Tuesday, Telkom Kenya accused the EACC and Safaricom of frustrating its merger with Airtel.
Telkom CEO Mugo Kibati said the move is “depriving commercial benefits to consumers and investments in the country as well as pushing for monopolistic competition and leaving 575 laid-off employees in limbo”.
Telkom and Airtel announced the expected merger on February 8, intending to combine their respective mobile, enterprise and carrier services businesses and form an entity, Airtel-Telkom before December.