Barely six months after Indian conglomerate Essar announced it was exiting Kenya’s energy sector, the company has decided to pull out of the country’s telecommunications sector as well.

The Indian giant, which has been operating in Kenya’s telecommunications sector as Essar Telecom Kenya, has entered into agreements with two Kenyan telecoms operators to dispose of its Kenyan operations and exit the East African country.

Essar Telecom Kenya has been operating a mobile service in Kenya under the brand name of yuMobile and, until its decision to pull out, it was the third mobile telephony services provider, with a 8.8% market share, according to the Communications Commission of Kenya (CCK).

Safaricom, Kenya’s biggest telecoms operator, is to acquire Essar’s network infrastructure and Airtel Kenya will acquire its 2.7-million subscribers by taking over the mobile number prefix.

The deal is worth $100-million and is awaiting regulatory approval.

“Safaricom has entered into discussions for the acquisition of some of the assets of Essar Telecom Kenya. The proposed transaction may have an effect on the value of the shares of Safaricom,” says Safaricom in a cautionary note to shareholders.

For its part, Airtel Kenya says it has sought approval from the CCK to acquire the telecommunications licences and subscribers of Essar Telecom Kenya.

“The proposed arrangement envisages over 2.7-million customers of Essar Telecom Kenya becoming part of Airtel Kenya’s mobile network,” says the company, owned by India’s Bharti Airtel.

The decision by Essar to exit Kenya’s telecoms sector comes barely six months after it opted out of Kenya Petroleum Refinery Limited (KPRL).

The company, through its subsidiary, Essar Energy, controlled a 50% stake in KPRL and decided to exit because the Mombasa-based facility was not economically viable.

Its decision to exit the telecoms sector is expected to change the dynamics of the sector, which is currently dominated by Safaricom.

In December, Essar Kenya sold its 10% stake in the East Africa Marine System, an undersea fibre-optic cable company, to Safaricom for $11-million.

CCK statistics show Safaricom controls the Kenya market, with 66.5% of the subscriber base, followed by Airtel, with 17.6%, yuMobile, with 8.8%, and France Telecom Orange, with 7.1% share.

The move by Essar Telecom to exit Kenya comes at a time when France Telecom, which operates in Kenya as Orange and controls 70% of Telkom Kenya, has revealed it is reviewing its operations in the country.

Analysts contend that France Telecom is contemplating exiting the Kenyan market after it announced plans to pull out of several African markets where its “operations are weak”.

Besides Kenya, the company also has operations in Uganda, the Democratic Republic of Congo, Niger, Côte d’Ivoire, Mali, Guinea and Senegal.