The deal is likely to be completed in the next three months and Telkom Kenya says it is a first for the region.
Telkom Kenya and Safaricom collectively own and operate over 4000 towers, and it is believed this will be the foundation for the partnership to develop and form an independently managed infrastructure company.
Bob Collymore, CEO at Safaricom, revealed the companies had been in talks for a while regarding infrastructure management: “We are equally cognisant of the environmental impact caused by the continued replication of infrastructure,” he said. “This initiative will lead to a rationalisation of those duplications in the interest of the public good and overall environmental sustainability.”
Telkom Kenya’s CEO Mickael Ghossein said, “We expect to consolidate future needs through central planning and deployment so as to take advantage of the economies of scale presented by this deal.”
Both companies believe the partnership will be largely modelled on similar infrastructure sharing deals around the world, including the business model of India’s Indus Towers, consisting of a consortium of telecoms operators in the tower space. It is likely the two-company consortium will be expanded to include other operators.
“Both operators [should now] become more competitive against other market players,” said Dobek Pater, analyst, Africa Analysis. “This may further drive market competitiveness but prices of services are already very low, therefore it may allow Safaricom and Orange to become more profitable at current retail service price levels.”
