Safaricom still considering yuMobile deal

IMG_8342-600x400Kenya’s leading operator Safaricom is still considering whether to proceed with its purchase of the core assets of smaller rival yuMobile, in spite of the Communications Authority of Kenya (CAK) granting approval to the acquisition.

Last week the regulator had approved the applications of Safaricom and Airtel to acquire yuMobile just a few hours shy of the deadline for approval and after Safaricom had accused the regulator of delaying the process and said it had abandoned the acquisition.

Safaricom chief executive officer (CEO) Bob Collymore told HumanIPO, however, the company was still considering its position with regard to the deal.

“We’re looking at the conditions set out by the CAK as well as the broader issue of the recent ruling by the Appeals Court on digital migration, that is likely to have a significant impact on the industry as a whole,” he said.

“In any case there can be no firm decision or agreement with the new CAK until the new Board is in place given that the previous CCK Board came to the end of its term on Monday this week,” he said.

Among the conditions laid down by the CAK as part of its approval were that Safaricom opens up its M-Pesa agency network to Airtel, Orange Kenya and mobile virtual network operators (MVNOs) despite the matter currently being the subject of a court case, a move Safaricom is against and plans to fight.

Safaricom, Airtel and yuMobile met on Monday to discuss the rules and according to yuMobile CEO Madhur Taneja there were several contentious issues for both purchasing operators that still require clarification before a decision is taken.

Airtel is seeking clarification as to when it is required to pay the KSh469 million (US$5.4 million) fee set by the communications regulator, be it upfront or in January 2015 when the licence will be renewed.

Another bone of contention for Airtel is which licence to cede to the regulator, as it wants to buy yuMobile’s business, which includes its licence and which if allowed could make it the owner of two mobile licences.