Kenya’s leading telecoms company, Safaricom has decided to pull out of the proposed acquisition of yuMobile’s assets, as a result of stringent conditions set by market regulator Communications Authority of Kenya (CAK), top of which is the sharing of Safaricom’s mobile money agency network, M-Pesa, with rival companies.
According to Safaricom, contrary to speculations on whether it would accept or reject regulator’s conditions, it had already pulled out of the race and was currently studying them to decide whether to revisit the transaction or not.
“I said last week and still maintain that Safaricom is no longer interested in this deal. The decision we must make is whether to come back to it or not,” Bob Collymore, Safaricom’s CEO said, adding that the company’s decision would be announced in three weeks.
Although Safaricom claims pulling the plug on the transaction has nothing to do with the set conditions, which was announced on Friday 28, the decision comes on the heels of a meeting with yuMobile on Monday 31 where the CAK conditions were discussed.
According to yuMobile’s CEO, Madhur Taneja, the telecoms company pointed out some controversial issues in the conditions given, and wanted clarity on the directive that it gives rival companies access to its M-Pesa agency network.
Though Safaricom position in latter weeks is highly anticipated, the telecoms company might not change its stance, as it has consistently refused to share its M-Pesa agency with rival companies, building a high fence around what is considered the company’s most successful business line.