Telkom accuses Safaricom of frustrating its merger plan with Airtel

Telkom-Kenya Managing Director Mugo Kibati is reading malice in the objection filed by Safaricom #ticker:SCOM over its planned merger with Airtel.

Mr Kibati said delay of the deal will hit workers who are expected to switch over through a recruitment process under the merged entity and risks entrenching Safaricom as a dominant player.

The company issued a one-month notice of redundancy, with effect from July 31, 2019, to its employees, informing them of the intention to terminate the employment as a result of the transaction.

They said that subsequently, the intention is to advertise and interview Telkom employees for positions in the combined entity and its outsourced partners.

“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 said.

Safaricom has not responded to these allegations.

The Communications Authority had issued a Kenya Gazette notice, expressing its intent to grant approval of the proposed merger of Telkom and Airtel businesses on July 12, 2019.

In the Gazette notice, the regulator asked any parties opposed to the intended merger make their submissions within 30 days, which lapsed on Monday August 12, 2019.

Last week, Safaricom told the press it had written to the CA, to urge the industry regulator not to approve the intended merger of businesses, as it had concerns that it wanted addressed first.

“Is the dominant player wary of competition, and even more precisely, wary of competitive pricing, choice and value for money for the consumer?,” Kibati said.

Safaricom is not the only one that has sought to stop the deal, Telkom confirmed that they received a letter from the Ethics and Anti-Corruption Commission (EACC) on investigations into allegations of misappropriation of Public funds in the process of the recapitalisation and restructuring of the balance sheet of Telkom Kenya Limited, 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.