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Tough conditions for Safaricom and Airtel over yuMobile sale

Kenya , 31 Mar 2014

Tough conditions for Safaricom and Airtel over yuMobile sale

The Communications Commission of Kenya (CCK) last week Friday set tough conditions to be met by mobile operators, Safaricom and Airtel, before it could approve the firms’ bid to acquire Kenya’s third operator, yuMobile.

Following Safaricom raising concerns over what it called slow approval process on the regulator’s side, CCK responded with 13 conditions that it said have to be met by all the three operators, before the deal to acquire yuMobile’s infrastructure and subscribers is agreed to.

CCK said that the operators would have to submit to the authority a framework for sharing mobile agent outlets for a range of mobile consumer services that include money transfer services and SIM registration.

This implies that Safaricom could be forced to open up its M-Pesa network to rival operators, a move that it has been opposed to since Airtel and the other operators tried to suggest such a move via the Competition Authority of Kenya.

Safaricom and Airtel will also be required to pay the regulator $5.5 million each, as a variation amount on the licence term to allow synchronisation of the assets to be acquired by the two operators. yuMobile on the other hand will be required to clear all its outstanding regulatory fees before the acquisition is approved.

While addressing a press conference on the deal approval, CCK director-general, Francis Wangusi said, “Approval of the buyout now depends on the three operators. Unless these conditions are met we are not going to approve the transaction and the faster they respond to the conditions the quicker we will conclude the matter.”

Safaricom has since not issued an official statement CCK’s response, as it is reported that the telco was in the process of reviewing the new acquisition conditions set by the regulator.

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