[kictanet] Safaricom’s ultimatum before Airtel-Telkom merger

[Ali Hussein]

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.

Regards

*Ali Hussein*

*Principal*

*AHK & Associates*



Tel: +254 713 601113

Twitter: @AliHKassim

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On Wed, Sep 4, 2019 at 6:49 PM Mwendwa Kivuva via kictanet <
kictanet at lists.kictanet.or.ke> wrote:

>
> https://www.standardmedia.co.ke/business/article/2001340740/safaricom-s-ultimatum-before-airtel-telkom-merger
>
> 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 million.
>
>
> “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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