Safaricom’s ultimatum before Airtel-Telkom merger


Indeed Spectrum is the next Real Estate. MJ raised valid concerns
though. As the Service Providers fight for a greater share of
Specturm, let us remain Vigilant on Quality of Service. I am sure the
Regulator is on our side.

Best regards

Barrack Otieno

On Thursday, 05-09-2019 at 05:52 Ali Hussein via kictanet wrote:

Very interesting.

Shoe on the other foot kind of thing? 🙂

Not sure this is an ‘ultimatum’. You just have to love how the media
loves to garnish stories. I must, however, say that what the Safaricom
CEO (notice I have not added ‘interim’ because I believe MJ is going
nowhere for a while and he has hinted as such himself) is asking for
makes sense. On the spectrum issue. However, I believe spectrum should
not be dished out on account of market share alone. Other
considerations should include:-

1. Public Good.
2. Serving marginalized areas.
3. Allocation to potential disruptive startups in the industry.

This should be interesting to follow.


Ali Hussein


AHK & Associates


Tel: +254 713 601113

Twitter: @AliHKassim

Skype: abu-jomo

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Any information of a personal nature expressed in this email are
purely mine and do not necessarily reflect the official positions of
the organizations that I work with.

On Wed, Sep 4, 2019 at 6:49 PM Mwendwa Kivuva via kictanet wrote:

Safaricom has set an ultimatum for the Telkom-Kenya and Airtel merger
while downplaying claims that it is opposed to the deal, which is
expected before the end of the year.

On Tuesday, Telkom-Kenya Managing Director Mugo Kibati cried foul over
Safaricom’s opposition to the deal, which he says, will spur
innovation in the sector and put Kenya in the map as a tech giant in
the region.

Safaricom says it does not oppose the move but wants the two operators
to settle a debt of Sh1.2 billion and the issue of frequency
allocation to be rebalanced.

“While we are supportive of industry changes that seek to deliver
greater choice and value to consumers, we have raised valid concerns
that we hope the regulator will consider and address as part of the
approval process,” says Safaricom CEO Michael Joseph.

“The first is the debt owed by the two operators, amounting to
Sh1,297,448,468.88, incurred for the provision of various services
including interconnection, co-location and fibre services. This debt
is due and payable, based on the agreement to provide services entered
into with the two entities as distinct operators. Our expectation is
that the payment obligations should be settled in full before the
transfer of business is effected.”

Safaricom also wants a rebalance to the frequencies allocation.

It says that the post-merger, Airtel-Telkom will jointly hold 77.5 MHz
of the spectrum against a customer base of 17.3 million, compared to
Safaricom’s 57.5 MHz with almost double the customer base at 31.8

“Given the size of Safaricom’s customer base in comparison to the
current spectrum holdings, it is apparent that the transaction will
create a disproportionate imbalance in the spectrum allocation, which
will be inconsistent with the market share,” says Joseph.

The interim CEO also wants equal treatment of operators and creation
of a level playing field within the industry, specifically in relation
to licensing and operations requirements. 

“Having articulated our concerns, we await direction from the
regulator on the way forward, especially in regard to the debt payment
and rebalancing of frequencies allocation.”  

“We also look forward to working alongside other industry players to
continue delivering high quality, innovative services to Kenyans.”

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