Econet Plans $300 Million Spend on Kenyan Network
Econet Wireless's Kenyan subsidiary has said that it is planning to spend upto US$300 million on a network roll out in order to comply with its license obligations which require the company to launch its network by this June.
The company is also seeking to take advantage of recent comments from the regulator to promote more sharing of network infrastructure as a way of lowering its deployment costs and speed up the rollout. However, according to Econet chief executive officer Philip Mudimu, neither of the two main incumbent operators, Safaricom or Celtel have responded to his requests for dialogue on the matter.
Mr Mudimu told The Nation newspaper that the firm would roll out by June, which is the deadline set by the regulator, Communications Commission of Kenya (CCK). "If they don't allow us to share the infrastructure, we shall build ours, but it will be more expensive." Mr Mudimu said. He said the firm intended to use $300 million (Sh21 billion) to initially roll out, in urban areas, where the returns are faster, before moving to the rural areas. Mr Mudimu said the national roll out is expected to be completed in three years.
Earlier this year, Econet Wireless International (EWI) sold a 49% stake in the company to India's Essar Communications Holdings (ECHL). The companies said that the move would significantly benefit Econet Wireless Kenya (EWK), which is 70% owned by EWI, from a rollout as well as product offering perspective. Essar says that it will actively participate with EWI in the network rollout of EWK.
The company has been looking for financing for its Kenyan operation after regulators cleared its license application - and a shareholder dispute last year.
EWI owns 70% of EWK with the balance held by local investors. Essar's stake in EWI will not alter the shareholding structure of EWK.
The Kenyan market is dominated by Safaricom - which the government has been repeatedly trying to sell a 25% stake in. According to figures from the Mobile World, the country had nearly 36 million mobile phone subscribers at the end of September 2007 - although that still represents a population penetration level of just 33%, leaving plenty of space for a third network to enter the market.
On the web: Mobile World - The Nation
Posted to the site on 20th March 2008
