Regulator rules on Safaricom and Airtel bids for yu Friday

Mergers, Acquisitions and Financial Results

Uncertainty continued to dog the proposed buyout of yuMobile on Thursday as Safaricom and Airtel awaited the industry regulator’s response on the fate of their bids by the end of on Friday.

The Communication Authority of Kenya (CAK) refuted claims that it had delayed approving the sale, adding that it was still within the time-frame provided by the Kenya Information and Communication (Licensing and Quality of Service) Regulations, 2010.

The regulations require CAK to communicate its decision on an application for the transfer or assignment of a licence to an applicant within 30 days of receipt of the request.

YuMobile, Airtel and Safaricom submitted their applications on February 28, 2014 meaning 30 days expire on Friday

“The issue on the proposed sale of yu business assets is receiving due attention at the authority and the operators involved in the transaction will be notified of the authority’s decision in due cause,” Francis Wangusi, the director-general CAK told the Business Daily.

The authority said it was relying on Section 10(2) and 10(3) of the Kenya Information and Communications (Licensing and Quality of Service) Regulations, which allow it to communicate its decision within a time frame.

This came as yuMobile and Safaricom said the delay was causing anxiety, with Safaricom hinting at the transaction falling apart as a result. Mr Wangusi said the authority had not received any formal application from any party wanting to pull out.

“The authority has not received any formal communication from Safaricom Limited about its intention to pull out of the deal and further the time provided for the authority to respond is yet to lapse,” Mr Wangusi added.

In a previous interview Mr Wangusi said the authority would be looking at various issues such as the impact of the buyout — where Safaricom wants the spectrum and Airtel prefixes or subscribers — on the competition in the sector, the fate of employees and subscribers and also how the business will be liquidated. He said the main focus would be on the frequency spectrum.

yuMobile has been scouting for a potential buyer for the last 14 months. The latest CAK quarterly report shows it is the only mobile operator that lost subscribers in the three months to September.

yuMobile, owned by India’s Essar Telecoms, shed 9.3 per cent of its subscribers to remain with 2.7 million or 8.8 per cent market share down from 10.9 per cent.

During the period under review, Airtel gained the most subscribers, 5.5 per cent, to reach 5.5 million customers from the previous 5.2 million or 17.6 per cent of market share.