Essar has made it official that it wants to sell of its Yu Mobile brand in Kenya. This emerged as the India-based company contracted BNP Paribas to value the company in readiness for the sale.
Essar Telecom had pumped in US$ 500 million in growing its business in Kenya. It became the fourth mobile operator in the country and put more pressure in the mobile wars.
Indeed Essar Telecom had posted growth with statistics showing a growth of 14.5 percent within the first quarter of this year, and overall posting the highest growth percentage among the four operators.
The decision to sell of Yu Mobile stems from the company decision to also sell its stake in Vodacom India, hence exiting the telecom business altogether. The company sold the Vodacom India stake at US$5.46 billion.
The exit also mirrors the company’s pull out from Warid Telecom’s operation in Uganda and Congo. Essar seemed to be scaling back their African expansion.
Sceptism is high on who will buy out the mobile company subsidiary in Kenya. The company has 2.5 million subscribers, a number none of the other three telecoms companies would want to ignore.
Yu Mobile introduced very competitive promotions for their subscribers, which helped them gain the numbers. Most of their subscribers are teens and young adults who use mobile communication with ease.
There has been speculation of a fifth mobile company entering the Kenyan market. Viettel from Indonesia has shown interest in entering the Kenyan and eventually African market. The Communication Commission of Kenya, CCK, has since said it will be hard to license another player in the market.