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18 September 2014
Shareholders at Kenya’s Safaricom have officially approved the company’s joint acquisition, with Bharti Airtel, of YuMobile.
The $120 million deal was
approved by shareholders at Safaricom’s annual
general meeting earlier this week, on the condition that it
will not affect their dividend payout.
Safaricom and Bharti Airtel are to acquire yuMobile from Essar
Telecom with the former acquiring the majority of its
infrastructure, and the latter taking on
yuMobile’s 2.55 million subscribers.
As well as ensuring shareholder dividends were not affected,
Safaricom chairman, Nicholas
Ng’ang’a, said: "The acquisition will
provide us with much needed frequency spectrum that will enable
us to accommodate more customers and roll out new
Bob Collymore, CEO at Safaricom, said that the lack of
frequency has been a long-standing problem for the company, and
that the acquisition was part of a strategic network
"We have a disproportionately small amount of spectrum relative
to our competitors given that we serve 22 million customers
compared to our competitors who have less than 6 million
customers," Collymore said.
"The addition to the current spectrum will result in a marked
improvement in quality of service on the Safaricom network. It
will also pave the way for the introduction of 4G LTE services
which will provide faster internet for our customers."
Ng’ang’a said that Safaricom would
finance the deal from its cash reserves and it will not change
the existing shareholder dividend of 47 cents per share.
The deal is still subject to regulatory approval.