"Airtel Networks Kenya Limited has sought an approval from the Communications Authority of Kenya to acquire the telecommunications licenses and subscribers of Essar Telecom Kenya Limited, which operates under the brand name 'yuMobile," Airtel said in a statement.
Industry sources said that Kenya's leading operator Safaricom has made bid to acquire the infrastructure of the company. The total deal is estimated to be between USD 90-100 million.
"The proposed arrangement envisages over 2.7 million customers of Essar Telecom Kenya becoming part of Airtel Kenyas mobile network," Airtel said.
This is second acquisition of Airtel within a month of it acquiring business and assets of Mumbai base Loop Mobile for about Rs 700 crore.
When contacted, yuMobile said it has filed application to transfer its mobile business yuMobile with the Communications Authority of Kenya (CAK) for an intended transaction to transfer its part of telecom business in Kenya.
In the application filed today, the company indicated, without naming Airtel and Safaricom, that it is engaged in substantive talks with "two potential suitors" who are willing to takeover its subscriber base and assets.
"We believe this proposed transaction will benefit all stakeholders and the Telecom Industry in Kenya," a yuMobile spokesperson said.
The company did not comment on deal size.
In March 2011, Essar exited from telecom business in India by selling its 33 per cent stake to Vodafone in Vodafone Essar, now Vodafone India, for USD 5 billion.
No immediate comments were received from Safaricom.