Essar sells Kenyan operation yuMobile

Investment fund Essar Group has reached an agreement to offload its Kenyan telecom business to African carriers Safaricom and Airtel for $120m.

The Kenyan service provider operates under the yuMobile brand in Kenya and will split its assets, divesting the network, IT and office infrastructure to Safaricom while Airtel will acquire the company’s subscribers. Almost 90 per cent of yuMobile’s employees will be absorbed by Safaricom and Airtel.

The transaction has received approval from the Communication Authority (CA) in Kenya and is expected to conclude during the fourth quarter of 2014. yuMobile will continue to operate and serve customers, offering uninterrupted services.

yuMobile’s Chief Executive Officer, Mr Madhur Taneja said: “We would like to reassure our customers that they will continue enjoying our products and services uninterrupted. We have structured the transaction such that our customers will not need to change their mobile numbers or sim cards, post this transaction. Moreover, we expect that the intended transaction will bring bigger benefits through an expanded product bouquet to the customers.”

Essar said there was some much needed consolidation in the Kenyan mobile telecommunications market to provide customers with fewer mobile operators, better equipped to enhance service delivery and provide customers with greater product offerings.”

The sale is Essar’s second significant portfolio exit in the last few months, following the sale in July of its US-based outsourcing company, Aegis US, to Teleperformance for $610m.

The Broadband World Forum is taking place on the 21st – 23rd October 2014 at the RAI Exhibition and Convention Centre, Amsterdam. Click here to download a brochure for the event.