575 workers representing 72 percent of Telkom Kenya workforce are set to be laid off ahead of its proposed merger with Airtel Kenya.
“We hereby give you one month’s notice, with effect from the date of this letter of our intention to terminate the employment of approximately 575 of our employees on account of redundancy as a result of the intended combination of Telkom Kenya’s mobile, enterprise and carrier services businesses with Airtel Networks Kenya,” Catherine Olaka, Telkom Kenya chief human resources officer said in a statement.
The company further said that it has forwarded the names of some of the employees to the new Joint Venture (JV) company to be considered for employment in available positions as long as they are qualified. The notice has also been circulated to all affected employees, the Communication Workers Union and the County Labour Offices.
In February, Telkom Kenya and Airtel Kenya announced the signing of a binding agreement to combine their respective mobile, enterprise and carrier service businesses. The new entity, which will be known as Airtel-Telkom is expected to challenge market leader Safaricom and steal part of its 65.4 percent market share.
According to statistics, as of October 2018, Kenya had about 45.4 million mobile customers out of which Safaricom has 29.7 million customers representing 65.4 percent market share. Airtel has about 9.7 million customers, Telkom 3.8 million and Finserve 1.9 million customers, representing 21.4 percent, 8.9 percent and 4.3 percent market share, respectively.
Airtel has been growing steadily over the years. In June 2017, the telco’s subscribers rose 11.9 percent from 8.7 million to 9.7 million to secure a market share of 21.4 percent, while Safaricom’s market share fell to 65.4 percent from 72.6 percent. The deal will see a stronger, more diversified entity put up a stronger challenge against Safaricom, for telecoms subscribers in Kenya.
Although while the merger will make competition in voice and data stiffer, Safaricom has an edge with M-Pesa, the mobile money service through which it now offers overdraft services.