Companies

Restrictions battle delays merger of Airtel, Telkom

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Marketers sell Airtel and Telkom lines in Nairobi. FILE PHOTO | NMG

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Summary

  • Airtel Kenya and Telkom Kenya filed an application with the Competition Tribunal on January 10 to have most of the post-merger conditions they were given by the CAK set aside.

The anticipated merger of Airtel Kenya and Telkom Kenya is set to delay by up to four months as the two companies await the verdict of a tribunal on the protest they made over conditions placed on their proposed tie-up.

The telcos filed an application with the Competition Tribunal on January 10 to have most of the post-merger conditions they were given by the Competition Authority of Kenya (CAK) set aside.

The rigorous process involved in evaluating their appeal could push the fate of the deal to May, according to the timelines set by the law.

The Competition Act 2010 allows the Competition Tribunal to receive applications for review of CAK’s decisions and make a ruling within four months.

“Within four months after the date of the making of an application for a review was made, the Tribunal shall make a determination,” the law reads in part.

The tribunal has powers to make one of several decisions, including overturning CAK’s conditions, amending them or upholding them. It can also refer the matter back to the regulator for reconsideration on specified terms.

The tribunal started the review process last week by inviting interested parties to start making comments on the Airtel and Telkom appeal. It seeks, among other things, the quashing of a condition barring the firms from selling any stake of the resultant entity within the first five years of merger.

The chairperson for the tribunal Stephen Kipkenda said in a gazette notice last week that the process of receiving and reviewing comments will take 30 days. Mr Kipkenda’s team will then communicate its decision to Airtel, Telkom and CA in writing and gazette the same, giving reasons.

The two telcos are facing a tall order to have the tribunal completely revoke four of the merger conditions and amend two others. They have the option to appeal the outcome should they feel dissatisfied. CA is also allowed to appeal if it differs with the tribunal.

“A party to an appeal under this part who is dissatisfied with the decision of the Tribunal may appeal to the High Court within 30 days after the date on which a notice of that decision has been served,” states the Competition Act.