Telkom to sack 575 staff ahead of merger with Airtel Kenya

Over 6 months after Telkom Kenya and Airtel Kenya signed a binding agreement to merge operations, the former has announced that it would send home over 500 staff before the joint venture can be actualised under a new brand, Airtel-Telkom.

In an internal memo issued to staff today, the telco has informed staff that “as a consequence of the transaction, Telkom Kenya must discontinue the transferred business and must terminate the employees that are currently deployed to serve in these functions”, adding that “other employees who provide administrative and /or support services are also likely to be impacted.”

The memo, signed by the firm’s CEO Mugo Kibati states: “We have notified the Communications Workers Union (COWU) and sent out individualised letters to staff where applicable as well as to the County Labour offices, giving one-month’s notice with effect from July 31, 2019, of our intention to terminate the employment of approximately 575 of our employees, on account of redundancy, as part of the Transaction”.

In February this year, Telkom kenya and Airtel Kenya signed an agreement to merge their respective Mobile, Enterprise and Carrier Services businesses in Kenya to operate under a joint venture company to be named Airtel-Telkom.

Telkom Kenya’s real estate portfolio and specific government services were not form part of the combined entity, while Telkom Kenya had the option of holding up to 49 per cent shareholding in the new entity.

Once in operation, the merged company is to be chaired by Telkom Kenya CEO Mugo Kibati while Airtel Kenya CEO Prasanta Sarma, will be the CEO.

Telkom Kenya is 60 per cent owned by Helios Investment Partners, with the remaining stake held by the Kenya government.

Aitel Kenya is owned by Bharti Airtel, an India-based firm with operations in 18 countries across Asia and Africa.

According to the latest industry stats from Communications Commission of Kenya (CA) covering the period between January to March 2019, Safaricom posted a market share of 62.4 per cent in mobile subscriptions down from 63.3 per cent registered in the previous quarter. On the other hand, Airtel gained 2.7 per centage points to post a market share of 26.1 per cent while Telkom Kenya’s market share dropped to 7.9 per cent from 9.0 per cent reported in the previous quarter. Similarly, Finserve Africa (Equitel) lost 0.8 per centage points to register a market share of 3.4 per cent with Mobile Pay’s market share remaining unchanged from last year’s quarter at 0.2 per cent.

By joining ranks, the combined entity to be known as Airtel-Telkom will now have over 17 million customers to serve.

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