HomeBusiness DigestEconet's flip-flop Kenya project proceeds

Econet’s flip-flop Kenya project proceeds

KENYA finally gave the go-ahead to a third mobile phone provider on Wednesday after Econet Wireless International paid the balance of its US$27 million licence fee.

f”>The South African-based firm, initially awarded the licence in September 2003, hopes to begin operations early next year.

Legal wrangling and the inability of a Kenyan partner, the Kenya National Federation of Cooperatives (KNFC), to raise its share of the fee delayed the issue of the licence, which had been scheduled for December 2003.

The deadline for payment fell last month but the country’s telecommunications regulator, the Communications Commission of Kenya (CCK), gave Econet another month to pay the US$12 million it owed after local partners had difficulty raising the money.

“Close to 20 months since we first advertised the intentions to license a third player in the market, we are happy to be able to finally grant this licence today,” CCK director Sammy Kirui told a news conference.

Econet Kenya Limited will hold a 70% stake in the mobile operator, while 30% will belong to a consortium of local partners including the KNFC, the majority participant.

Econet Kenya managing director Zachary Wazara told a news conference his company was warehousing KNFC’s shares and the cooperative had until November 18 to pay Econet and regain its stake.

“Our initial investment is US$75 million relating to the first year of operation and, depending on how the market responds, it will be increasing in subsequent years,” Wazara said.

He said Econet Kenya would introduce new number portability technology. This allows consumers to take their phone numbers with them when they switch providers, which is currently not possible in Kenya.

Econet, a sister firm to the Harare-listed Econet Holdings, faces an uphill task to compete in a market dominated by market leader Safaricom, a venture by state-owned Telkom Kenya and Britain’s Vodafone.

The other mobile operator, Kencell, is majority-owned by Celtel International, Africa’s third-largest mobile provider. — Reuter.

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