THE South African Altech Group’s US$70 million investment in Econet Wireless Group (EWG) has been approved by the SA Reserve Bank, meaning the 50% equity deal is now progres
By taking a stake in Econet, the JSE Securities-listed Altech group will create one of the largest telecommunications groups in SA as well as across seven African countries.
The amalgamation, to be consummated by the formation of a new holding firm referred to as Newco, will also bolster the group’s chase for high growth general services mobile (GSM) cellular projects on the continent and beyond.
Econet assets considered under the agreement include the Mascom Botswana shareholding, the upstart New Zealand project, British-based Econet Satellite Services and Econet Wireless Nigeria, which has been renamed Vee Networks. Also included is Worldstream Ltd.
In a related development, the Reserve Bank of Zimbabwe has also approved EWG’s acquisition of Zimbabwe Stock Exchange-listed Econet Wireless Holdings’ 14% stake in Mascom, Gaborone’s largest mobile operator.
The Altech deal was also subject to Zimbabwean monetary authority approvals.
Meanwhile, Econet Wireless Zimbabwe says it has increased its subscriber base to more than 237 000, up 64 000 on the figures released by the Harare-based company recently.
The company said its subscriber base is more than its competitors’ combined aggregate and now commands 50% market share of the Zimbabwean mobile phone sector also featuring state-run Net*One and Telecel.
In a trading update, the company said it had doubled its payphone service to 3 000 units countrywide and expects to install 2 000 more by the end of December.
The newly-found or promoted telephony venture is targeted at the mass – lower-income markets.
Econet, whose operations have come under attack in the past weeks following the arrest of its directors, has more than 5 000 shareholders. It said an estimated 500 000 people could be utilising these payphones, installed in shops and other convenient places monthly.
Econet says the mobile network’s subscriber increase is mainly due to aggressive network expansion that has added capacity, making it possible for the cellular company to take on board new contract and pre-paid customers of its popular prepaid “Buddie” pack.
In light of these investments and growth, Econet could be providing more pronounced telecoms service to a wide cross-section of people in just six years of its launch, industry watchers say.
The company has also intensified its community reinvestment programmes through the high-profile Capernaum Trust which targets orphaned children and disadvantaged members of society.
However, Econet’s community efforts have been rewarded with company executives Douglas Mboweni and chairman Tawanda Nyambirai being arraigned before the courts for allegedly externalising money and depriving the fiscus of much-needed cash resources.
However, Econet, led by founder Strive Masiyiwa, is fighting the charges.