The Communications Authority of Kenya on 28th February, 2014 received applications from Safaricom Limited and Airtel Kenya Limited proposing to acquire the assets of Essar Telecom Limited.

Airtel expressed to acquire Essar Telecom’s subscribers, GSM licenses and Essar Telecom’s subscriber related contracts.   On the other hand, Safaricom expressed interest in acquiring Essar Telecom’s passive infrastructure located on 453 sites and associated agreements, transfer of the ground leases on which the passive infrastructure is situated, Essar Telecom’s Data Centre situated in its existing office space, Essar Telecom’s existing office space and related infrastructure, Essar Telecom’s right to use the spectrum and Essar Telecom’s residual assets including IT infrastructure.

We wish to inform the public that the matter has been given due consideration by the Board of the Authority.  Subsequently, the parties involved have been notified of the decision of the Authority. It is worth nothing that the Authority has carefully examined the proposals and considered the various options available to the Regulator.  We are cognizant of our responsibility as the sector regulator to facilitate the access and use of ICTs by the people of Kenya, with this as a key ingredient in stimulating the growth and development of our country’s economy.  We are all aware that the mobile sector in particular has experienced tremendous growth since liberalization.  With the four mobile operators in the market, Kenya now boasts over 31 million phone subscribers.  The mobile sector has diversified and equally emerged as a critical support base for numerous ICT services.

The growth and the centrality of the mobile sector cannot be overemphasized and this was a critical consideration in the applications that have been made to the Authority with respect to the intended exit of one of the operators.  We also note the Authority’s role in ensuring optimal utilization of resources in the ICT sector.  In this respect, the Board of the Authority has granted an approval of the applications subject to the three parties meeting the conditions attached to the approval. 

The Authority has provided a transition period of six months to allow for seamless transfer of the services within the parties involved. The compliance of the three firms to the requirements will determine the final consent of the Authority for the sale and transactions between Essar Telkom, Safaricom and Airtel Kenya.

Some of the conditions include the payment of the outstanding regulatory fees by the firms involved. They will also be required to ensure that all Essar Telecom’s subscribers retain their numbers and related contracts in the transition period.  Additionally, the authority is also requesting that Airtel submits the proposed Service Level Agreement (SLA) for the subscribers acquired from Essar Telecom.

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.  In the same vein, the Authority would want to uphold the principle of infrastructure sharing and in this regard, Safaricom has been requested to provide its proposed framework for sharing its overall passive and active infrastructure with other licensed operators and service providers. Both Safaricom and Airtel have also been requested to submit their framework and an implementation plan that shows their commitment to facilitate national roaming to mobile subscribers on all mobile networks.  The Authority envisages that such facilitation will be on similar terms and conditions to all networks.

The mobile market landscape is quickly changing.  The Authority has therefore taken a forward looking approach in anticipating the entry of more players including Mobile Virtual Network Operators (MVNOs) and increased use of agency services.  The conditions given to the firms have taken into consideration the need for shared use of communication infrastructure and networks in order to optimize the resources available.

We are positive that even with the envisaged expansion of the market and additional subscribers to the networks of Airtel and Safaricom as a result of the sale, Kenyans will continue to enjoy quality services from the providers.  The Authority wishes to underscore the importance of quality services to mobile subscribers. 

I would like to assure Kenyans that the Authority is committed to maintaining a conducive regulatory environment in promoting investment in ICTs.  We now await the response of the three firms so that we can progress the sale for the benefit of all Kenyans.

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