Struggling player Essar Telecom Kenya (Yu Mobile) has applied to the Communications Commission of Kenya (CCK) for approval to sell its infrastructure and customers to two of its rivals.
With mounting losses and a market share of only 9%, as opposed to…
Struggling player Essar Telecom Kenya (Yu Mobile) has applied to the Communications Commission of Kenya (CCK) for approval to sell its infrastructure and customers to two of its rivals.
With mounting losses and a market share of only 9%, as opposed to 67% for Kenya’s leading operator Safaricom, Yu Mobile has been struggling to survive.
Madhur Taneja, the CEO of the India’s Essar Group-owned operator, told newspaper Weeekend Business that an application has been submitted to the CCK. The information was confirmed by a CCK spokesperson, who said that the regulator is currently reviewing the application.
According to the report, Safaricom is likely to acquire Yu’s infrastructure to improve the quality of its services while Airtel is expected to go after the operator’s 2.8 million customers, allowing it to boost its market share to 27%.
Telkom Kenya is the country’s smallest operator with about 2.2 million subscribers. Parent Orange is understood to be considering a sale of its unit but it remains unclear how news of Yu Mobile’s exit will now affect its plans.
Yu Mobile’s difficulties are not recent. Since it entered Kenya in 2008, its operations have been affected by an ongoing price war in the market. In 2012, it received Sh13bn (US$150m) from Essar to help pay off its debts.
Around the same time, local investors were reportedly looking to sell their 20% shareholding to Essar, which owns the remaining 80%, because of their inability to further invest into the business.
Recently, in late January this year, Taneja was quoted saying that he was planning to finalise the sale of a stake in the company for Sh8.54bn (US$99.4m) in March following discussions with several international firms.
Taneja declined to disclose the name of the buyers or the size of the stake at the time.
