A Safaricom customer care centre in Nairobi. The firm plans to pay
yuMobile Sh6.9 billion in respect of the company’s assets. PHOTO | FILE
By OKUTTAH MARK, mokuttah@ke.nationmedia.com
In Summary
- The agreement reached by the three parties will see Safaricom take over 150 yuMobile employees and Airtel 25.
- 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 be paid to retire.
- The employee transfer arrangement comes as a relief to yuMobile workers, who went to court early this year seeking to block the sale of the company before their fate is known.
Telecom operators Safaricom
and Airtel have agreed to absorb 175 of exiting yuMobile employees as
part of the Sh11 billion buyout deal expected to be concluded this week.
The agreement reached by the three parties will see Safaricom take over 150 yuMobile employees and Airtel 25.
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 be paid to retire.
Safaricom last Friday announced plans to pay
yuMobile Sh6.9 billion in respect of the company’s assets, including
frequency spectrum, transmission towers and IT equipment. The deal is
subject to shareholders’ approval.
Airtel Kenya has agreed to pay Sh4 billion for
yuMobile’s subscribers and the operating licence, meaning Airtel will
have two Global System for Mobile communications (GSM) licences once the
deal is concluded.
The employee transfer arrangement comes as a relief
to yuMobile workers, who went to court early this year seeking to block
the sale of the company before their fate is known.
“The transaction is now almost coming into a
conclusion. No deal has been signed yet but we expect this to be done
either on Monday or Tuesday,” said a source privy to the negotiations.
Our source said that after signing the sale agreement the three parties will notify the Competition Authority of Kenya (CAK).
The fate of employees and subscribers and also how
the business will be liquidated were among the issues the telecoms
regulator put into consideration before approving of the deal.
“The authority is in agreement with your request to
take over ‘Essar Numbering Ranges’ in order for the migrating Essar’s
subscribers to retain their numbers,” Francis Wangusi, the
Communications Authority of Kenya (CA) director-general said in an
approval letter to Airtel.
The letter added that Airtel would be required to
conduct an audit of all the numbers assigned to it and to release unused
numbers from the system six months after the transfer of yuMobile
numbers.
The acquisition of yuMobile subscribers will see Airtel’s subscriber base rise to 7.5 million from the current five million.
For its part, Safaricom will have the much-needed
frequency spectrum to accommodate its growing subscriber base that hit
the 21 million mark between January and March and to improve the quality
of its voice service.
On Friday Safaricom issued a circular to its
shareholders calling for a special meeting where their approval will be
sought to acquire East Africa Tower firm owned by Essar Telecoms, the
owners of yuMobile.
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