yu confirms shutdown plans; rivals scramble for assets

3 Mar 2014

Essar Telecom Kenya (yu), Kenya’s third largest mobile phone operator by subscribers, has confirmed media rumours that it is set to shut down and sell off its assets to its rivals. According to Standard Media, late on Friday night CEO Madhur Taneja broke the news to the cellco’s management team, admitting that the company has already applied to the Communications Commission of Kenya (CCK) seeking to sell its infrastructure and customer base, to Safaricom and Airtel, respectively.

TeleGeography notes that the provisional ‘carve-up’ plans make sense on an operational level; yu’s network consistently ranks as the best in the local market, while market leader Safaricom has an overloaded network that is notorious for dropped calls and patchy service. Meanwhile, India’s Bharti Airtel is a keen believer in in-market consolidation, and will likely relish the opportunity to grow its market share via a strategic acquisition.

South Africa-based MTN Group and Vietnam’s Viettel Group are both likely to be following the developments with interest, while Kenya’s fourth-placed cellco, Orange Group-backed Telkom Kenya will also be monitoring Essar’s plans.

Kenya, Airtel Kenya, Communications Authority of Kenya (CA), Essar Telecom Kenya (yu), Safaricom