Telkom/Airtel Networks Kenya Joint Venture Kaput
Telkom Kenya announced yesterday that it will no longer be pursuing the proposed joint venture transaction with Airtel Networks Kenya. The decision was mutually agreed with Airtel Networks Kenya Limited, the company said.
Telkom said the reason for the cancellation of their joint venture plans is because of the challenges that the companies experienced in getting all the approvals required to complete the transaction.
According to The Standard in Kenya, the country's National Treasury was to blame for the delays in completing the transaction. The regulator is on record as saying it has given the transaction the green light after meeting its conditions, although a few other issues remain pending.
“The National Treasury is holding back the proposed merger between Telkom Kenya and Airtel Kenya as the government assesses the viability of the sale of its 40 per cent stake in the former,” the article said.
In view of the bottlenecks, Telkom decided to explore other avenues to bolster its services in Kenya.Telkom had previously announced the retrenchment of hundreds of workers, who were urged to reapply for positions within the new entity to be formed between Airtel Networks Kenya and Telkom Kenya.
Telkom now notes that the Notice of Redundancy that Telkom issued on the 31st July 2019 was withdrawn and the earlier envisaged redundancies due to the joint venture no longer apply. “The new, bold and exciting direction the company is now embarking on, offers all Telkom employees the opportunity for greater career progression, as the company commences the new phase of its development, to establish itself as an essential player in the new digital world order.”
Telkom says their confidence in their new direction is further bolstered by the accelerated digital transformation brought about by the recent dynamics of the COVID-19 pandemic. It has made both businesses as well individuals acutely aware of the need to review direction, with respect to how they do things, and the need to step-up.
This accelerated digital transformation is particularly important within the telecommunications sector, owing to an increased demand for data and broadband, the company says.
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.