YuMobile sale could lock out Safaricom and Airtel due to the new rules

By WINSLEY MASESE

Nairobi, Kenya: The Communications Commission of Kenya has spelt out new tough conditions to be met before the approval of the acquisition of Essar Telecom Kenya Ltd assets through a joint bid by Safaricom and Airtel.

Mobile operators Safaricom and Airtel will each have to pay Sh464 million ($5.4 million) besides meeting other conditions in what is seen as a new move by the regulator to lock out the firms from buying out yuMobile.

“We have accepted the application for the acquisition made on the 28th February, but the complete approval depends on how fast they meet the new conditions,” said Director General, Francis Wangusi. Asked by reporters if the new conditions are unlikely to be met by the two bidders, Wangusi said the current arrangement is the best as opposed to liquidation.

“We do not know if they are going to fulfil these conditions and it’s up to them. What we wanted to do is meet the deadline required to communicate,” he said.

There is no however a timeline given for the conditions to be met. Airtel for example is required to give a commitment to the authority to maintain numbers and related contracts for the existing Yu subscribers, for a transition period of six months from the date of the approval of the acquisition. After this, the Yu numbering resources shall revert to the authority. The operator will also be required to submit to the regulator for approval service level agreement (SLA) for the subscribers acquired from Yu within the six months of the transition period.

New player

“Airtel will also have to communicate to its existing subscribers on its intention to transfer their subscriber contacts to Airtel Limited with the current term of service,” noted Wangusi.

The three operators involved in the deal will also be required to jointly submit to the regulator a proposed arrangement for approval that guarantees seamless continuity of services to subscribers during the transition.

Safaricom and Airtel will also be required to fulfil statutory and licence conditions on retention of records relating to Yu operators, concerning the acquired assets.

Safaricom will be required to submit to the authority for approval, a framework for sharing its overall passive and active infrastructure with other licensed operators and service providers.

However, Wangusi said that it would have been easier for a new player to acquire the assets than the existing ones.

“It would have been easier for a new player to come in and acquire the Essar assets as opposed to divesting its shares to Safaricom and Airtel,” he said. Even after accepting the application for the acquisition, the regulator has to seek consent of the Competition Authority of Kenya.