ECONET INTERESTED IN BUYING VIVENDI’S KENCELL STAKE
Econet Wireless International has said it is examining prospects of buying out Vivendi’s 60 per cent stake in KenCell Communications Ltd. Strive Masiyiwa, Econet CEO, said: "It is a fact that there is a process going on for Vivendi to dispose of their interests in Kenya, and we have been approached. We are looking at it. As one of the players in the African telecoms sector, it was only natural that we would be approached."
Econet now joins Mauritius Telcom in the fray to acquire the Vivendi stake in Kenya’s second largest mobile phone service operator. Vivendi last year said it wanted to dispose of the assets, and France Telecoms and MTN were initially seen as potential buyers.
"We are reviewing the documentation that they have given us but it is still to early too tell you we are interested," said Masiyiwa.
A KenCell executive said Vivendi was dealing with its Kenyan exit plans in Paris. KenCell said it has 600,000 subscribers on its books, but analysts say only between 450,000 and 500,000 are active. With the mobile service operator’s revenue per user currently put at Sh22,400 (US$280), analysts estimate that its 600,000 subscriber base gives the firm a valuation of Sh13.4 billion (US$168 million). Mauritius Telcom, MTN and now Econet Wireless are currently seen as top contenders for the Vivendi stake.
Vivendi’s decision to divest from the country coincides with the Kenyan Government’s plan to license a third mobile phone operator to compete with Safaricom and KenCell. Though Masiyiwa agrees there is need for a third operator, he is pessimistic about the planned auction attracting many top- notch bidders.
Speaking of his frustration with Kenyan officials during the negotiations for the possible stake in Telkom Kenya two years ago, Masiyiwa said from the very beginning, it was clear the Kenyan leaders were not keen to divest from the fixed line monopoly.
"As a company, we won’t go into an environment where we are being muscled by politicians, and that was what was happening in Kenya. It was such a disgraceful factor," Masiyiwa said. But he has a word of caution for the new government: "Serious investors don’t jump in quickly. What is necessary now is for the new administration to settle down. They mustn’t expect people to come in with US$200 million or US$300 million investments within three or four months. It doesn’t work that way. What people (investors) will do is keep coming in and looking, and if the Government continues to fulfil its campaign pledges, in 12 months’ time, Kenya will look very exciting."