Telkom Kenya has cited delays in getting approvals from the Communications Authority of Kenya (CA) for the dragged formation of two subsidiaries announced last year.
Telkom, in May 2021, said it was re-organising its company structure to create two wholly-owned subsidiaries -- Telkom Digital and T-Kash -- for its financial services businesses that had kicked off in August 2020.
T-Kash subsidiary will house its mobile money services and announced loan app to compete with KCB M-Pesa and M-Shwari, which its rival Safaricom operates.
The digital subsidiary is expected to involve infrastructure including a fibre network, international submarines cables and a smart landing hub to act as a gateway to the East African region amid increased demand for data service.
Telkom Kenya chief executive Mugo Kibati, however, said the formation has lagged on CA’s approval. CA did not respond to the Business Daily queries by press time since Thursday.
“We have done most of it we are waiting for the regulator’s approval. Once the regulator approves it, it’s done. Everything is done,’’ Kibati told Business Daily.
Mugo’s intention to form the subsidiaries counters Safaricom, which has remained opposed to splitting its telecommunications business from the mobile money transfer and lending units.
The giant telco says it wants to retain the connection between its business lines and ride on data analytics to grow revenue rather than break up the company, against Parliament’s push to dilute its dominant position in the market.
Telkom is expanding its 4G network with the addition of 2000 network sites to strengthen its data coverage amid rising mobile internet demand.
The firm is investing Sh11.7 billion ($100 million) in the expansion plan that will be undertaken in partnership with telecommunication companies – Swedish-based infrastructure provider, Ericsson and South Africa- based systems integrator NEC XON.
The investment is expected to increase the firm’s internet speed service and propel the firm’s capacity to gain a larger share of the internet business amid increasing competition for mobile data subscriptions in the market.
The telecommunications company in partnership with Pakistan and East Africa Connecting Europe (Peace) in March this year also launched the sixth submarine internet cable to offer higher speeds, lower latency and broader bandwidth.
The Sh46 billion cable connects Africa to France and Pakistan through the Europe-Asia route, providing direct connectivity to Asia, which is expected to reduce communication delays between Africa and Asia.
The company is also moving to advance its mobile money service platform, T-Kash to take over the dominant M-Pesa.
T-Kash plans to launch a mobile loans service, giving Telkom Kenya customers access to instant microcredit via their mobile phones.
It is in the process of integrating its mobile money service, T-Kash’s systems with local commercial banks to allow customers to send and withdraw money from their accounts.
The consumer service delivery unit will remain within Telkom. Telkom said there won’t be any no job losses as a result of the exercise.