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No deal! Telkom walks out on proposed merger with Airtel

NAIROBI, Kenya, Aug 5- Telkom Kenya has announced that it is no longer pursuing a merger with Airtel Kenya Networks Limited.

Telkom Chief Executive Officer Mugo Kibati in a statement announced that the two firms have made an agreement to stop the merger plans and that Telkom will pursue other strategic options to grow the business.

“After carefully reviewing the available options, Telkom has opted to adopt an alternative strategic direction and will no longer be pursuing the proposed joint venture transaction. This decision has been mutually agreed with Airtel Networks Kenya Limited,” said Kibati.

The move has now forced the company to withdraw its earlier statement of firing as many as over 500 employees in its planned merger.

“Consequently, the Notice of Redundancy issued by the Company on 31st July 2019 is withdrawn and the earlier envisaged redundancies no longer apply,” Kibati added.

According to Telkom, the company will now work towards accelerating digital transformation brought about by the recent dynamics of the COVID-19 pandemic, that has made both businesses as well individuals, acutely aware of the need to review direction, with respect to how we do things, and the need to step-up.

“The transformation dynamic also presents Telkom with a strategic advantage, to better position its infrastructure asset base and services, to support this digitisation and, in the mid to long term, bridge the consumer digital divide; connecting the unconnected by way of cutting-edge technologies such as Loon,” reads Telkom Chief Executive Officer Mugo Kibati statement.

The statement comes as Telkom Kenya last month launched loon, 4G enabling balloons in partnership with American tech giant, Alphabet.

It now has the potential to expand its internet subscription by 4.8 million users.

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Telkom Kenya accounted for 6.2 percent of the local mobile telecom subscribers’ market as at December, behind second-placed Airtel, which had a 25.9 percent market share.

The two telcos, were seeking to challenge market leader Safaricom, sought a review of among other conditions, the order to not lay off any worker within the first two years or sell any assets of the resultant entity within the first five years.

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