No major change in yuMobile brand  after Airtel buyout

yuMobile brand will continue to exist and operate under its previous terms even after the buyout of its 2.55 million subscribers by Airtel Kenya last year.

Under the agreement with India’s Essar Group, Airtel will retain the brand for two years and pay more if it fully wants to own the brand.

Airtel Kenya CEO Adil El Youssefi said subscribers will continue to  enjoy affordable and free calls as was the case when the telco was owned by India’s Essar Group.

“The product is still in the market, subscribers use the brand name yuMobile, and they enjoy better coverage on a superior network,” said Mr El Youssefi. “Our market share also increased by acquiring yu subscribers.”

The deal makes Airtel the first mobile operator to run two brands in one market. By retaining the brand, Airtel is tapping into the youth market who are the main subscribers of yuMobile.

SHARING THE SPOILS

Airtel came out public on Friday last week with an advertisement bearing the brand name yuMobile, “.....free yu to yu calls all day and night.”

The telco confirmed that they kept the yu brand name and subscribers should identify it with Airtel “henceforth”.

“yuMobile customers will also retain their existing mobile numbers, continue to enjoy their yuMobile services including Sh3 yuMobile calls to other networks, free yuMobile-to-yuMobile calls, SMS rates  at Sh1 for yuMobile-to-yuMobile and Sh2 yuMobile to other networks and value-added services,” Mr El Youssefi said.

YuMobile was acquired by Airtel and Safaricom, East Africa’s largest mobile operator, for $120 million.

Airtel acquired the subscribers, the brand name and absorbed 25 employees.

Safaricom acquired the infrastructure and absorbed 150 employees. The acquisition consolidated Airtel’s position as the second largest mobile operator in Kenya with a combined customer base of more than 8 million.and a 26.6 per cent market share.

The 2.55 million yuMobile subscribers will also benefit from an ongoing upgrade on Airtel’s 3G and later the fourth generation high speed network.  

Airtel invested Sh2.5 billion in the upgrade to ensure quality, increased data speeds and stronger signals.

Communications Authority has also given Airtel regulatory approval to launch its 4G technology which will ensure high speed internet.

Airtel has begun campaigns that will see more subscribers acquire yuMobile SIM cards to access the services. Currently, every top up on yu attracts a 25 per cent bonus under a new promotion.

Despite investments to increase the quality of calls and internet on yuMobile, the brand has failed to support Airtel’s business.

A year after the acquisition, Communication Authority quarterly statistics showed a significant fall in Airtel’s talk time and short text messages.

VOICE TRAFFIC

“Airtel’s traffic declined substantially to 722 million minutes, down from 1.0 billion minutes recorded during the previous quarter. Its market share in voice traffic declined to 9.8 per cent, down from the 13.4 per cent reported during the previous period,’’ highlighted CA quarter two statistics released in early March.

Airtel Kenya’s corporate affairs director Dick Omondi said the firm bought yuMobile just 10 days before the quarter (October to December 2014) marked in the report, “They do not reflect the true results of the acquisition.”

The telco experienced a reduction of 280 million minutes in a year when the main competitors recorded increases in both voice and SMS traffic.

Safaricom’s traffic increased to 6.2 billion minutes, up from 6.0 billion minutes.

In the same period, Orange recorded a gain of 102 million minutes in mobile voice traffic to post 458 million minutes during the quarter.

The figures raise questions whether the telco gained any value from the much-praised acquisition of yuMobile last year.