Telkom Kenya ditched plans to merge with rival Airtel Kenya in favour of alternative options focused on boosting its position and accelerating digital transformation in the market.
In a statement, Telkom Kenya CEO Mugo Kibati noted the u-turn was driven by challenges in getting approval for the merger, along with an assessment of “alternative strategic options” to strengthen its consumer proposition and establish its brand as “Kenya’s preferred data network service provider”.
He noted the decision was mutually agreed with Airtel Kenya.
“Our confidence in Telkom’s new direction is further bolstered by the accelerated digital transformation brought about by the recent dynamics of the Covid-19 [coronavirus] pandemic”, Kibati said, adding the situation had made the operator “acutely aware of the need to review direction, with respect to how we do things”.
The operator said it also took a step back from earlier plans to make redundancies and instead was offering its employees “the opportunity for greater career progression”.
Kibati stated the transformation move provided “a strategic advantage” regarding the use of its infrastructure and assets in a digital transformation.
The merger was announced in February 2019, but faced numerous obstacles including concerns from a committee in Kenya’s National Assembly regarding a private company acquiring a public entity, and a review by the Ethics and Anti-Corruption Commission.