Bob Collymore (pictured), Safaricom CEO, said the operator had already given up interest in smaller rival Yu by the time the regulator slapped tough conditions on any takeover deal.

“I said last week and still maintain that Safaricom is no longer interested in this deal,” Collymore told Business Daily. “The decision we must make is whether to come back to it or not.”

Collymore said Safaricom – the largest mobile operator in Kenya – was looking at the conditions set by the Communications Authority of Kenya (CAK) to see if there was anything in there that might allow it to get back in the race for Yu. It was not a question, he said, of accepting or rejecting the conditions.

The CEO said a decision would be made public in three weeks.

A main sticking point is the M-Pesa money service. Safaricom is unhappy that it would need to open up its M-Pesa agency network – as a condition of a Yu deal – to rivals Airtel, Telkom Kenya Orange and MVNOs.

In February, both Safaricom and Airtel expressed an interest in Yu, owned by Essar Telecom. Safaricom had an eye on buying Essar Telecom’s passive infrastructure (located on 453 sites), while Airtel was keen on Yu’s GSM licences and subscribers

However, the industry regulator attached strict conditions. According to allAfrica.com, these included the payment of Essar Telecom’s outstanding licence fees. That would mean both Safaricom and Airtel having to stump up $5.4 million.

According to estimates from GSMA Intelligence, Yu had 2.8 million connections by the end of 2013, well behind market-leader Safaricom (20.1 million).

Airtel had 5.7 million connections, while Orange (Telkom Kenya), in fourth place, had 2.3 million.