Kenya's Yu to Close Network - Sell of Infrastructure and Customer Base
Published on: 2nd Mar 2014
Struggling Kenyan mobile network Yu which is owned by India's Essar Group has applied to the telecoms regulator to close down its services.
A deal has been reportedly agreed to sell its network infrastructure to Safaricom and its customer base of around 2.7 million subscribers to Airtel.
Although the network has ranked highly in regulatory quality tests, the company has struggled to raise funds for network expansion and subscriber growth has been sluggish.
Safaricom can hope to see a significant improvement in its network quality of service once it integrates Yu's equipment, and that may help to stave off a rumoured conflict with the telecoms regulator later this year when the Safaricom license is due to be renewed.
Meanwhile, Airtel with 5.5 million customers would get a substantial boost to its customer base and come closer to being able to compete with Safaricom, which remains the dominant mobile network in the country.
In related news, employees at Yu are seeking a court order blocking Yu's CEO Madhur Taneja from leaving the country until redundancy payments are settled by the company.