We started hearing about rumours of sale of Essar Kenya in 2010, just one year after the entry of the group in Kenya. We then revealed in June 2011 that yuMobile was shopping for a buyer. Everyone denied it but the cat was already out of the bag. yuMobile approached all those they saw as potential buyers, locally regionally and even abroad. In fact the former CEO who is now at Kenya Data Networks, Atul Chatulverdi, hawked the company from door to door after running it down.

You must however give it to Madhur Taneja who has done great in increasing the subscriber numbers. It is just not clear if the new subscribers are loyal to the brand to attract any interesting offer from a potential suitor, different from the $300 million which Essar demanded for its stake in 2011.

The new buyers of yuMobile are said to be Vietnamese state owned mobile operator, Viettel Group. Viettel recently launched in Mozambique and promised to have Kenya as its second home in the coming month. A Daily Nation article reporting of the same indicated that the group will come in Kenya as the fifth operator.

That is not possible since the Kenyan government has not shown any interest in auctioning such a license in the near future nor do I have any indications from the senior government officials I have talked to that we might have a fifth operator in the country.

According to recent returns submitted to CCK and released in the sector statistics, yuMobile showed the best growth in subscriber numbers. This might be a good and bad thing. Good for the goodwill of the suppliers but bad in that potential buyers will look more at the loyal clients and not the balooning subscriber numbers which might not be easy to retain.

Essar Group has appointed BNP Paribas to look for a potential investment partner according to a statement from the groups offices in Kenya. Essar has denied planning to sell 72% of its 80% shareholding on Essar Kenya. The firms CEO, Madhur Taneja, has said that the group has invested over Ksh 40 billion in Kenya and they would not look to exit with such an investment. Taneja said that the firm is just looking to raise capital for future expansion. This is an absolute lie. The truth is that Essar is exiting Kenya very soon.

India’s Financial Chronicle reported that the Group had engaged Paris based bank, BNP Paribas, to help in disposing its majority stake in the Kenya’s fourth mobile operator.A senior Essar official is quoted in the magazine as saying:

“We have appointed BNP Paribas for the sale of our controlling stake of about 72 per cent in yuMobile. We expect the valuation for the same to be several hundred million dollars.”

Essar Group first entered the Kenyan telecoms market in 2009 after buying 49% of Zimbabwe’s Econet Wireless stake in the firm. The group later increased its shareholding to 80% leading to the total exit of Econet Wireless International from the Kenyan market. The other stake of 20% is currently held by Startnet which is associated with Peter Kibiriti and Jos Konzolo.

Recent CCK statistics for third quarter 2011/2012 indicate that yuMobile grew its subscriber base by 14.5% from the previous quarter and by 61.2% from the previous year to stand at 2,554,258 subscribers. The publication also revealed that the firm controls around 8.7% of Kenya’s telecom market with Orange controlling 10.6%, Safaricom 65.3% and Airtel 15.3%. yuMobile currnetly control the third highest voice traffic at 8.7%, Orange at 0.8%, Airtel at 13.2% and Safaricom at 77.3%.

The current mobile penetration rates in Kenya stand at 75% according to CCK

yuMobile hold a huge chunk of 4G spectrum in Kenya and also has a 10% stake in Kenya’s 85% stake on The East African Marine System (TEAMS).