The Communications Authority of Kenya (CA) has reported a decline in the number of mobile internet subscribers following uncertainty over a proposed merger deal between Airtel and Telkom.
According to the report, there were only 38.85 million internet subscribers as of March 2020, a 16 percent fall from 46.46 million subscribers in the same period last year.
“The merger deal collapsed last month with Airtel Kenya and Telkom Kenya citing unacceptable conditions placed on the proposed amalgamation besides delays in receiving regulatory approvals,” reports Business Daily.
“The companies had entered into an agreement on February 8, 2019 to combine their mobile, enterprise and wholesale divisions, a proposed deal that led to uncertainties on the fate of Telkom Kenya subscribers.”
Telkom has since restructured its business model to leverage on the growing digital penetration in the country.
The company now seeks to expand its 4G network using their existing spectrum to throw their focus into consumer and data business under the leadership of two of its managing directors, Steve Okeyo and Chris Senanu.
Okeyo will handle Telkom Consumer data and financial services while Senanu is the new Managing Director, Telkom Digital. His office will handle new technologies such as Internet of Things (IoT), cloud, big data and analytics.
“We have seen a shift in global consumer trends and the Covid-19 pandemic has accelerated the digital transformation that was inevitable,” said Telkom CEO, Mugo Kibati in a TV conference last month.
In the recent past, Telkom has lost most of that business to existing mobile service providers like Safaricom as most corporate entities have adapted to the use of mobile service lines. This has seen Telkom lose its voice market share to 5.8 per cent in 2020.
Kibati pointed out that Telkom would not be diverting from its main revenue streams, but that they would redirect their focus to ramping up their digital offering.
“This digital transformation is particularly important within the telecommunications sector, creating an increased demand for broadband, connectivity and digital platforms by the individual consumer, corporates and the public sector,” he said.
Telkom controls a major percentage of Kenya’s data infrastructure but has struggled to grow its market share in fixed data past 0.8 per cent. The market is largely controlled by Wananchi, Jamii and Safaricom.
Telkom also retracted its plans to lay off its staff in light of the new strategy. Last year, the company had said it would lay off 600 staff as part of the merger plans with Airtel.