Kenya’s Safaricom is reportedly unhappy with the country’s regulator about having to open up its M-Pesa agency network with rivals should it wish to acquire the assets of smaller operator Yu.

Bob Collymore (pictured), Safaricom CEO, nonetheless stressed that Kenya’s biggest mobile operator had pulled out of the race for Yu before the Communications Authority of Kenya (CAK) attached a series of tough conditions to any takeover deal, including the sharing of its popular M-Pesa mobile money service with Airtel, Orange and MVNOs.

“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 added that Safaricom was looking at the conditions set by CAK to see if there was anything in there that might prompt it to get back in the race for Yu. It was not a question of accepting or rejecting the conditions.

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 on all three companies. According to allAfrica.com, these include 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.