East Africa’s Leading mobile phone company, Safaricom may allegedly abandon its bid to acquire assets owned by Essar Telecom Kenya Ltd in the absence of regulatory approval.
Communications Authority of Kenya has to date not acknowledged Safaricom’s receipt of application to make the acquisition which was handed in by the telco one month ago. Safaricom plans to buy Essar’s network base stations and transmission equipment. However, the regulator has demanded that Safaricom improve its network quality before being granted a new license. Airtel, the second-biggest operator, is set to take over Essar’s 2.75 million subscribers and licenses.
Yu, the Essar owned Telecommunication Company is also yet to hear from the regulator after accumulating substantial losses over the past six years being the reason for its sale.
“For all concerned, this transaction was very time bound, 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.” said Nzioka Waita, Corporate Affairs Director, CAK.
Essar, Safaricom and Airtel currently have a memorandum of understanding though they have yet to sign a legally binding agreement. The delay in considering the deal by the authority may become protracted its board’s term of office ends in April 2, since the process of interviewing and reconsulting the board has only “just been kicked off” by the ministry of information and communications technology.