Airtel Kenya has said it is ready to pay KSh4 billion to acquire Yu’s subscribers and its operating licenses. Meanwhile, it will cost Safaricom KSh7 billion to acquire Yu assets including its frequency spectrum.
However, Airtel will have the right to use the Yu brand for the next two years. As a result, Airtel wants to fully own the brand and is willing to pay more to Essar.
The deal pushes Airtel subscribers to 7.5 million from the previous 5 million, narrowing the gap with Safaricom, which has 21 million customers. After reaching a definitive agreement with Yu’s owner, the Indian conglomerate Essar Group, the three parties will have to get approval from The Communications Authority of Kenya so as to seal the agreement.
Safaricom and Airtel will be taking up the 175 employees of Yu. The two telcos have agreed that Safaricom will take 150 employees and Airtel 25 of them. yuMobile, which is owned by Indian conglomerate Essar, has 197 employees excluding the expatriates, meaning 22 employees will not be absorbed in the arrangement and will have to be paid off.
Kenya’s telecommunications sector will be left with only three players: Safaricom, Airtel and Orange.