Safaricom set to abandon Essar pursuit over M-Pesa clause

4 Apr 2014

Safaricom has cast the ‘carve-up’ of Essar Telecom Kenya (yu) into doubt, Business Daily Africa reports, quoting CEO Bob Collymore. In a report published yesterday, the chief executive insisted that market-leader Safaricom was already out of the race to acquire the latter’s assets by the time the Communications Commission of Kenya (CCK) imposed its tough conditions on the deal. Safaricom is specifically unhappy with the demand that it opens up its M-Pesa money transfer system to rivals Airtel and Telkom Kenya, as well as the country’s would-be mobile virtual network operators (MVNOs). Collymore told the newspaper: ‘I said last week – and still maintain that – Safaricom is no longer interested in this deal. The decision we must make is whether to come back to it or not’. He added that his company would make public its decision in three weeks.

As previously reported by TeleGeography’s CommsUpdate, early last month Essar applied to the CCK for approval to sell its infrastructure to Safaricom, and its customer base to Airtel Kenya. However, CEO Madhur Taneja later admitted that the sale of Essar’s Kenyan assets had been under discussion for seven months, and prior to agreeing to a deal with its Kenyan rivals, Essar approached Orange Group, Etisalat, MTN Group and ‘a Vietnamese telecoms company’ [likely to be Viettel Group] about a possible acquisition. If the carve-up falls through, it remains to be seen whether any of those aforementioned players will step into the breach. Vietnam’s military-backed Viettel Group dispatched representatives to Kenya in October 2013 to carry out due diligence on ailing full-service telco Telkom Kenya, and the opportunity to piece together a double-deal for Kenya’s two smallest mobile players may yet pique Viettel’s interest.

Kenya, Airtel Kenya, Essar Telecom Kenya (yu), Safaricom, Viettel Group