Kenya’s largest mobile operator, Safaricom, has received all the required regulatory approvals to finalise its US$80m acquisition of rival Yu Mobile’s assets.
The announcement follows Indian conglomerate Essar agreeing to sell its struggling Yu…
Kenya’s largest mobile operator, Safaricom, has received all the required regulatory approvals to finalise its US$80m acquisition of rival Yu Mobile’s assets.
The announcement follows Indian conglomerate Essar agreeing to sell its struggling Yu subsidiary to competitors Safaricom and Airtel for a combined US$120m in early September.
Under the agreement, Safaricom, which controls over 65% of Kenya’s mobile market, will take over the minnow’s passive network infrastructure and spectrum, as well as 150 of its employees.
Airtel is expected to acquire the company’s 2.55 million subscribers.
In a statement today, Safaricom said it has received the go-ahead for the deal from the Communications Authority of Kenya (CA), the Competition Authority of Kenya (CAK) and the Capital Markets Authority of Kenya.
Airtel, which is controlled by Indian telecoms giant Bharti Airtel, has not revealed whether it has also secured regulatory approval for the transaction and was not immediately available for comment.
The Yu deal was first announced earlier this year and, in late March, the CA granted Safaricom and Airtel conditional approval to split the operator’s assets between them.
However, Safaricom, which is controlled by Vodafone, had reportedly been unhappy with one of the conditions requiring it to open up its mobile phone-based money transfer and micro-financing service, known as M-Pesa, to rival MNOs and MVNOs.
Meanwhile, Airtel was concerned about the timeline for the regulatory fee payment and whether it might need to sell one of its licences.
In August, the CA reportedly decided to remove several conditions linked to the sale of Yu.
With mounting losses and a market share of only 9%, as opposed to 66.5% for Vodafone’s Safaricom and 18% for Airtel, Yu has been struggling to survive.
The operator has been affected by an ongoing price war since it entered the market in 2008.
The country’s fourth and smallest mobile player, Telkom Kenya, may also be sold. Its parent, French incumbent Orange, launched a strategic review of the asset a few months back which could see it offload the operator or bring in a new partner.
The Kenyan market is expected to see further developments over the next few months as more MVNOs are set to make their debuts.
