Telkom's fibre backbone is considered a strategic government asset, and will not be part of merger.
Telkom Kenya could still retain its brand name for its ICT business even after the merger with Airtel Kenya, a regulatory notice revealed Friday.
The two telecommunications firms have sought the Communication Authority of Kenya (CA) nod to merge their mobile, enterprise and carrier services to form a single joint venture company to be named Airtel-Telkom.
“The applicants have…made an application to the Communications Authority of Kenya of their intent to combine their telecommunication businesses in Kenya, through the transfer of Telkom Kenya's mobile, enterprise and carrier business to Airtel Networks Kenya Limited in exchange for Telkom Kenya gaining a shareholding in Airtel Networks Kenya,” said CA director- general Francis Wangusi in the notice.
“The parties have further indicated that upon approval of the proposed merger, Airtel will thereafter be renamed Airtel-Telkom, while Telkom will continue operating in the ICT sector providing certain other services to select customers,” the regulator added while hinting at its possible approval of the deal.
The CA has also asked any parties opposed to the merger to make their submissions ahead of the intended nod within a month.
Mr Wangusi said in the notice that CA intends to grant approval for the merger, “subject to the parties fulfilling certain conditions.”
Telkom had earlier hived off its fibre network business in the ongoing merger talks to give the government a secure communication system, sources familiar with the transaction had revealed.
It operates the National Optic Fibre Backbone (Nofbi), which provides telecommunications connectivity in all 47 counties.
People familiar with the transaction told the Business Daily that the government, which holds a 40 percent stake in Telkom Kenya, had ruled out handing control of the strategic asset to a party that it did not have control over due to the sensitivity of communications and State documents it is involved in transmitting.
Telkom Kenya’s fibre optic project is taxpayer funded. Phase one of the project was completed in 2009 and established a national optic fibre backbone infrastructure which passes through 58 towns in 35 counties across Kenya with 4,300km of cable already laid.
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