Econet sells stake to Essar to finance Kenya roll-out
Published January 11th, 2008
(TP) India’s Essar Communication Holdings has bought 49 percent in Econet Wireless International, which has 70 percent of the shares in the third mobile operator in Kenya. Econet Wireless Kenya, which is yet to roll out its services, has been looking for a suitable financier since the Communications Commission of Kenya cleared its licence in September. By buying into the Econet parent company, Essar intends to inject capital for the roll-out of the Kenyan operations. Lawyers who advised on the deal told the Business Daily that Essar Communication will provide close to half a billion dollars for the roll-out. “Essar also intends to bring in a new model which is similar to those used in places like Indonesia, Philippines, India and Pakistan, which will offer competitive pricing and aggressive network roll-out,” said Anjarwalla and Khanna Advocates, noting that the deal would not affect the current Kenyan ownership structure. Econet had reportedly tried to get the foreign financier to be incorporated as one of its partners. This was however turned down by the government since it was against the licensing rules. Econet was licensed in 2003 but has not been able to roll out service due to protracted court battles. Econet Wireless International has a presence in eight African countries, Europe and the East Asia Pacific region.
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