Telkom Kenya, Airtel win case against CAK merger condition
Airtel Kenya and Telkom Kenya won their appeal against merger conditions inclined by the Competition Authority Kenya (CAK).
The Competition Tribunal overturned the majority of the conditions placed on the two telcos when the authority approved their proposed merger on December 13. The ruling was made on Monday.
The two companies have now been allowed to keep their existing network licenses in accordance to conditions imposed by the Communications Authority of Kenya (CA) including the 900 megahertz (MHz) and 1800 MHz spectrum owned by Telkom.
They moved through Competition Tribunal court on January 31, 2020, to challenge the conditions which were imposed by the CAK alongside a huddle which required Telkom Kenya to clear a debt amounting to Ksh1.3 billion.
“The Competition Tribunal invites interested parties to make submission/proposals/comments to the Tribunal in regard to the application for review within the next thirty (30) days of this notice for consideration by the Tribunal,” the gazette notice said.
These are among contested conditions which the two wanted to be reviewed;
• Review of the transfer of operating and frequency licenses imposed by CAK and be set aside in its entirety
• Review of the condition that Telkom Kenya’s 900Mhz and 1800Mhz frequencies be returned to the Government of Kenya once they expire
• Review of the banning of any entry to any form of sale agreement within 5 years imposed by the CAK
• Review of the condition that prevents commercial negotiations with the government in relation to access to fibre managed by Telkom Kenya as imposed by the CAK.
• Review of the imposed CAK condition in relation to the retention period of employees from two years to twelve months.
• Review of the condition for the provision of annual reports to two years from the date of approval
The tribunal also lifted the prohibition barring the merged entity from entering into commercial agreements within the first five years including sale agreements but limits the entity from being taken over or floating more than 40 percent of its stake.
Previous conditions would have exhibited barriers, limiting the merged entity from advancing on market leader Safaricom which had in its part made demands to the CA including the immediate clearance of Ksh.1.3 billion in debt accrued by the pair and a rebalance of frequency allocations.