Airtel absorbs yuMobile users into its network after buyout

Airtel has absorbed all yuMobile customers into its network. This is after the operator bowed out of the Kenyan market for failing to break-even.

“We completed the integration of the two systems three weeks ago, this means that a yuMobile customer will see ‘yu/Airtel’ in his or her phone,” Airtel Kenya’s Chief Executive Officer Adil El Youssefi, told Weekend Business.

He explained that yuMobile will continue to operate as a unique brand under Airtel and the services and products previously enjoyed by yu customers will not change. “This is the same case with the branding. This is to make sure there is no confusion in the customers’ mind,” said Youssefi.

If anything, he noted, yu customers will now be connected to the Airtel 3G network which he noted is faster than yuMobile’s.

“After integration of their numbers into the Airtel system they will now start enjoying Airtel’s data (roaming services) and network connection across the country,” he added.

The yuMobile customers will also maintain their call rates and enjoy more tariffs that are affordable and suit their needs. “All products and services remain the same. It is the quality of network and customer experience that will now match what Airtel offers to its consumers,” he said.

Mr Youssefi also noted that Airtel plans to increase the number of yuMobile outlets across the country so as to reach out to their customers wherever they are.

However, yu customers will start incurring roaming charges. “But we are working on special [roaming] rates for them,” he said. “We are also planning to make sure that the experience they will get on Airtel is superior to what they used to get. That is our commitment with our loyal yu customers,” the CEO assured his new found customer base.

The buyout was unprecedented as for the first time a company in one sector was being co-acquired by competitors. yuMobile’s infrastructure was acquired by Safaricom while Airtel got subscribers.

The acquisition of Airtel customers increases Airtel’s market share from 17.6 percent (5.5 million subscribers) to around 26.4 percent (8.2 million subscribers). However, with a lion share of 66.5 percent (about 21 million subscribers), Safaricom’s stranglehold on the telecom market has hardly been threatened by these developments.

Making losses

Failure to turn a profit was the main reason why yuMobile bowed out. And so far, neither Airtel nor Orange has been able to break-even. Mr El Youssefi fears that if such a trend continues then the market will be left with only one player. As Essar exits the Kenyan market, it goes badly bruised.

By disposing of the outfit at about Sh11 billion, it exited at a loss of about Sh37 billion. Safaricom paid about Sh7 billion to acquire yuMobile’s network, IT and office infrastructure, while Airtel Kenya is estimated to have paid Sh4 billion for its 2.5 million subscribers and current operating licence.

Telecom analyst Peter Wanyonyi says Essar suffered from not seeming to have a clear strategy in the first place, in Kenya. “We were never quite sure who their target market was, or what services made them stand out from the crowd: at the beginning, they seemed to simply want to pile on more and more subscribers, without any particular offering that would stop customer churn,” said Wanyonyi in an earlier interview.

Essar Group is looking to consolidate its attention onto its core activities — financial services. “With Yu making losses and not gaining any significant traction in the market, there was no way it was ever going to survive,” he said.