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Telkom Restrategizes To Focus on Consumer And Data Products after Failed Merger Talks With Airtel

Telkom Kenya has embarked on a new business strategy following announcement of failed merger talks with Airtel Kenya early this month. The company has restructured its business model to leverage on the growing digital penetration in the country.

Telkom 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.

“Given our vast infrastructure asset base, terrestrial fibre and our 4G network, we are confident in this new direction,” he added.

Read: Airtel-Telkom Merger Collapses After Failing To Get Regulatory Approvals

In the new business strategy, Telkom is seeking to venture into more lucrative businesses such as the provision of internet fibre to homes. This will precede Telkom’s previous efforts to attract voice and fixed-line customers which were the lifeline of the business years back.

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.

Read Also: Telkom to Power Afya Rekod COVID-19 Monitoring Platform

“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 said that the company would not be laying 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.

Read Also: Telkom Kenya to Power University of Nairobi’s E-Leaning Programme

This new development comes with the revelation that Telkom Kenya has been struggling to hold on to its mobile money, T-Kash, subscriber base. Data provided by the Communications Authority of Kenya (CA) in the last Market Penetration report revealed that Telkom had closed down more than 500 of its T-Kash agent outlets between January and March 2020.

T-Kash subscription also reduced by 30 per cent from 19,607 last year to 13,333 this year. This saw the company’s market share reduce to 0.05 per cent in 2020.

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