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Yu deal gets green light – but with tough conditions

Following a month of uncertainty, the Communications Authority of Kenya (CAK) has approved a joint bid from Safaricom and Airtel to take over the assets and subscribers of the country’s number three operator, Yu.

The bid was originally lodged a month ago, and as recently as last week it was believed that the CAK would not approve it. That said, the regulator has imposed tough terms on both the buyers and the seller Essar if the deal is to go ahead.

The buyers must accomplish a “seamless transfer” within a six-month timeframe. During this period, all of Yu’s subscribers must be able to continue using their phone numbers and related contracts.

Francis Wangusi, the CAK’s director general, stated: “Consumer protection is one of the core mandates of the Authority. In considering its obligation, the Authority has asked the three firms to ensure that in their proposed arrangements guarantee seamless continuity of services to subscribers.”

“Additionally, the authority is also requesting that Airtel submits the proposed Service Level Agreement (SLA) for the subscribers acquired from Essar Telecom,” he continued. Safaricom and Airtel will reportedly also have to cover Essar’s unpaid licence fees – meaning each firm will have to fork out $5.4 million.

 

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