Safaricom May Walk from Deal to Buy Essar Telecom's Network
Published on: 26th Mar 2014
By: Ian Mansfield
Kenya's Safaricom has said that it might walk away from a deal to buy network infrastructure assets being put up for sale by Essar Telecom citing regulatory difficulties.
Essar Telecom put its yuMobile network subsidiary and its customer base up for sale after deciding to pull out of the market.
While Airtel agreed to buy the customer base of around 2.7 million subscribers, Safaricom agreed to pick up the network infrastructure.
However, Safaricom's Corporate Affairs Director Nzioka Waita says that a month after they submitted the detail of the transaction to the regulator, they still haven't heard anything back.
The Competition Authority of Kenya's Director-General Francis Wangusi is refusing to comment on the report.
"For all concerned, this transaction was very time-bound," Waita said March 24. "We are giving very serious consideration to pulling out for the simple reason that the lack of regulatory certainty puts us in a place where the key fundamentals of the transaction have changed."
Essar Telecom has also complained that it hasn't formally heard from the competition regulator either.
Kenya has four mobile operators Safaricom, Airtel, yuMobile and Orange. Consolidation is seen as necessary for the two smaller operators which are both losing money to compete with the dominant Safaricom.