HomeBusiness DigestEconet increases stake in Kenya

Econet increases stake in Kenya

Godfrey Marawanyika

ECONET Wireless International (EWI) says it has raised its stake in Kenya’s planned third mobile phone operator from 10% to 51%.

tica, sans-serif”>EWI group’s chief executive officer Strive Masiyiwa on Tuesday confirmed that they had increased their stake in their East Africa operations. “It’s already done. We have increased our stake in Kenya to 51% from 10%,” Masiyiwa said.

Econet’s main Kenyan partner is the Kenya National Federation of Cooperatives, which brings together 10 000 local cooperative societies with a membership of 5,7 million.

Econet plans to inject about US$100 million of equity into the business, including half of the $27 million licence fee.

Econet Wireless Kenya won the race to become the country’s third mobile phone service provider in September last year, prompting criticism from the two current providers because the price was half what they had paid three years ago.

The latest development of EWI increasing its stake in Kenya comes hard on the heels of heavy behind the doors lobbying by the Malawi Privatisation Commission, which is battling to offload Malawi Telecommunications.

The commission is lobbying EWI to rebid for its tender.

Initially EWI had won the tender but eventually pulled out.

The government has been temporarily blocked from granting the licence because of a legal challenge from a rival bidder over the tender process. The third licence was due to have been issued in December.

In Kenya, EWI is keen to secure its position in case it is ousted in Nigeria, where it is locked in a dispute with South Africa’s Vodacom over a takeover bid.

This week South Africa’s Allied Technologies Ltd is understood to have agreed to buy half of cellphone operator Econet Wireless International for around US$70 million.

But Masiyiwa refused to comment on the latest development.

Sources said the deal had already been struck.

They said the two parties could however not say anything until regulatory approval has been granted.

Sources within the industry said although the buy was almost complete, it would not affect the company’s operations in Zimbabwe.

Econet operates mainly in Africa but has a presence in South Africa, Kenya, Zimbabwe, Lesotho, Morocco, Botswana, Britain and New Zealand and recently won a mobile licence in Kenya.

Altech is controlled by Allied Electronics Corp Ltd and has interests spanning telecoms, information technology, electronics and multimedia industries.

It is run by the prominent South African Venter business dynasty.

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