The Communications Commission of Kenya (CCK) has granted conditional approval to the sale of Yu Mobile’s assets to its larger wireless rivals, Safaricom and Airtel.
With mounting losses and a market share of only 9%, as opposed to 66.5% for Vodafone’s…
The Communications Commission of Kenya (CCK) has granted conditional approval to the sale of Yu Mobile’s assets to its larger wireless rivals, Safaricom and Airtel.
With mounting losses and a market share of only 9%, as opposed to 66.5% for Vodafone’s Safaricom and 18% for Airtel, Yu Mobile has been struggling to survive.
Earlier this month, it was announced that Yu would stop operating and that its assets would be split between the two market leaders.
In a statement today, CCK said Airtel, a unit of Bharti Airtel, is looking to buy the minnow’s subscribers and GSM licences while Safaricom is interested in acquiring its network infrastructure. The latter will, however, need to share its passive and active infrastructure with other licensed operators and service provides, the regulator director general Francis Wangusi said.
The commission added: “Among the conditions are that all firms involved be current in payment of the outstanding regulatory fees, that they ensure that all Yu subscribers retain their numbers and related contracts in the transition period and that Airtel submits the proposed service level agreement (SLA) for the subscribers acquired from [Yu]”.
Financial details have not been disclosed and the commission and operators were not immediately available to comment
CCK has provided a six-month transition period “to allow for seamless transfer of the services from [Yu Mobile] to the buyers”, the statement read.
Yu’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 Indian parent company 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 in the business.
The country’s fourth and smallest mobile player is Telkom Kenya, which has less than 7% of the market. Its parent, French incumbent Orange, has recently launched a strategic review of the asset which could see it sell the operator or bring in a new partner.
