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NEWS & CURRENT AFFAIRS

The Nairobian

yumobile loses 100,000 customers to competitors over uncertainty

Business

By Macharia Kamau | Jul 29, 2014

The delay in concluding the sale of Essar Telecom's assets could be having an impact on its business, with the network now experiencing a decline in the number of customers as the sale hangs in the balance.

A quarterly report by the Communications Authority of Kenya (CAK) shows that yuMobile lost 100, 000 customers in the three months between January and March this year.

yuMobile customers went down to 2.55 million from 2.65 million in the quarter to December 2013. It was the only operator whose number of customers reduced during the quarter, with other operators making gains in subscriber numbers, albeit marginally.

Safaricom and Airtel had in February this year expressed interest in buying yuMobile in a deal that was conditionally approved by CAK. The conditions have however elicited negative reactions with other operators chiding the regulator for asking for too much before conclusion of the deal.

These sentiments might have brought a feeling of uncertainty among yuMobile subscribers, a small number of whom have now left the network.

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"The mobile subscriptions for Safaricom, Airtel and Telkom Kenya (Orange) recorded positive gains while Essar Telkom recorded a drop during the quarter under review," said the report.

"Safaricom and Airtel gained 1.5 and 1.8 per cent subscriptions respectively. Telkom Kenya had the highest gain in subscriptions of 8.8 per cent, whereas Essar Telecom lost 3.5 per cent of its subscriptions."

During the quarter, yuMobile and Safaricom lost market share – despite Safaricom having attracted more customers to its network.

"With regard to market shares as measured by subscriptions, Telkom Kenya (Orange) recorded an increase in shares of 0.5 percentage points to stand at 7.7 per cent up from 7.2 per cent shares recorded during the previous quarter," said the report.

"Safaricom Limited and Essar Telecom limited lost 0.1 per cent and 0.5 per cent of market shares to reach 67.8 per cent and 8.0 per cent shares respectively.

Airtel shares remained unchanged at 16.5 per cent. The report shows that the number of mobile phone users grew marginally to 31.8 million subscriptions up from 31.3 million recorded by December 2013.