India’s Essar Telecom is to buy-out local minority shareholders at its Kenyan arm, Essar Telecom Kenya, in a bid to keep pace with rivals Safaricom, Airtel and Orange. Kenya’s Business Daily reports that Essar has alerted the local regulator that it intends to buy-out the 20 percent stake in the firm held by local companies Capital Africa, CrossLink and Startnet, giving it 100 percent control. According to sources, these partners have failed to contribute to ongoing recapitalisation of the company following Essar’s acquisition of the business (from Econet Wireless) in 2008. The deal is estimated to be worth “millions of [Kenyan] shillings.” The change of ownership structure comes against the backdrop of news that Essar Kenya is expecting a big strategic investor early next year, although regulations require that local firms must eventually hold at least 30 percent of the operator’s shares.

According to the report, rivals Safaricom, Airtel and Orange have all announced plans to expand or upgrade their networks – putting pressure on Essar to follow suit. Essar – which operates in Kenya under the ‘yu’ brand – is the country’s second-largest operator with 1.6 million connections in Q3, according to Wireless Intelligence data. The market is dominated by Safaricom, which has more than an 80 percent market share. Bloomberg reports separately today that Essar has also launched a mobile money transfer service in collaboration with Kenya’s Equity Bank. The service – known as Yu Money – will compete with rival services such as Safaricom’s M-PESA and Orange’s recently-launched Orange Money. Yu Money has been in development for the last 15 months and has a network of 5,000 agents nationwide.