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Airtel, Safaricom seek to buy Essar-owned Kenyan telco YuMobile

Kenyan telecom operator Safaricom Ltd and Airtel Kenya Ltd, the local unit of Indian telecommunication giant Bharti Airtel Ltd, have made a joint bid to acquire Essar Telecom Kenya Ltd, which operates under the brand of yuMobile, for $100 million.

Kenyan telecom regulator Communications Commission of Kenya said that it has received applications from the two companies to acquire yuMobile, which is the fourth-biggest operator in the country. 

Founded in 2008, Essar Telecom Kenya, formerly known as Econet Wireless Kenya Ltd, is based in Nairobi, Kenya, and is joint venture between India’s diversified business group Essar group and Zimbabwe-based Econet Wireless International.

Presently, yuMobile has a subscriber base of over 3 million.

As part of the deal, Safaricom will get yuMobile’s infrastructure like base stations so as to improve the quality of its network, a local newspaper reported. Safricom is 40 per cent held by the British telecom behemoth Vodafone Group Plc.

On the other side, Bharti Airtel, which is present in 17 African countries, may acquire the subscriber base of the company that began operations in December 2008.

The acquisition, if goes through, will mark another expansion for Bharti Airtel in Africa. Last year Bharti Airtel signed a definitive agreement to buy out Warid’s Congo Brazzaville business after snapping Warid’s Uganda business.

It had also acquired an additional 13.36 per cent equity stake in Airtel Networks Ltd, Nigeria, from certain existing shareholders taking its holding to 79.06 per cent stake in Airtel Networks (formerly known as Celtel Nigeria Ltd), the single-largest African telecom asset of Bharti Airtel.

It became an indirect subsidiary of Bharti Airtel (with 65.7 per cent holding) as part of a multi-billion-dollar deal in which Bharti Airtel acquired the pan-African telecom assets of Zain. In 2010-11, the company took over operations in 16 countries across Africa and a year later, expanded its footprint through a greenfield launch in Rwanda. Airtel is the second-largest among all telecom operators in Africa.

Back home, Airtel has recently struck a deal to acquire Loop Telecom which would make it the top telecom operator in the country’s financial capital Mumbai.

(Edited by Joby Puthuparampil Johnson)

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