CAK grants conditional approval for sale of yuMobile
CAK director general Francis Wangusi during a press briefing at the authority's offices in Nairobi on March 28, 2014. Photo/DIANA NGILA
What you need to know:
Safaricom intends to acquire yuMobile’s infrastructure, while Airtel wants to acquire the firm's 2.7 million subscribers by taking over the mobile number prefix.
The deal is valued at about Sh8.6 billion ($100 million).
Safaricom and Airtel are supposed to pay CAK Sh467 million ($5.4 million) each in what the regulator said would be the variation of the license term in order to synchronize the acquired assets.
The Communication Authority of Kenya (CAK) has granted conditional approval to Safaricom and Airtel Kenya to acquire their rival yuMobile, opening a new chapter in Kenya’s telecommunication landscape.
The two firms are supposed to pay CAK Sh467 million ($5.4 million) each in what the regulator said would be the variation of the license term in order to synchronize the acquired assets.
yuMobile has been asked to pay all outstanding regulatory fees that run into millions. Safaricom and Airtel are also required to submit for approval a framework for hosting the Mobile Virtual Network.
Safaricom intends to acquire yuMobile’s infrastructure, while Airtel wants to acquire the firm's 2.7 million subscribers by taking over the mobile number prefix, thus allowing the customers to migrate to its network without having to change their identities.
The deal is valued at about Sh8.6 billion ($100 million).
“Safaricom and Airtel submitting to the Authority, for approval, framework for sharing agents outlets for various mobile consumer services including money transfer services, SIM registration centers etc., and give a commitment to share such agent outlets,” CAK director general Francis Wangusi said on Friday.
Safaricom’s CEO Bob Collymore declined to comment on the matter saying he needed time to study it.
Airtel and yuMobile have been pushing for Safaricom to allow them share their M-Pesa agents.
Last year, Airtel filed a complaint with the Competition Authority seeking to compel Safaricom to allow its M-Pesa agents to offer Airtel money services alongside their M-Pesa.
However, Safaricom in previous interview with the Business Daily said it had spent billions of shillings to grow its M-Pesa agency and would not open the shops to rival operators.
M-Pesa had 17.1 million users by March 2013 and provides real time money transfer to individuals, pay bill services, businesses, dividend payments and international money transfers.
Its revenue has grown to Sh21.8 billion in March from Sh7.6 billion in 2010.
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