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Safaricom Kenya Eyes Two More Data Providers

Mobile provider Safaricom has set its sights on buying two more data firms by end of the year. They will bring to four the number of acquisitions by the telco in the recent past as it seeks to entrench itself in the data market.

Chief executive Michael Joseph on Thursday said the board of directors had approved the buyout of IGO Wireless Limited and Instaconnect Limited. The intended acquisitions are subject to shareholder and statutory approvals, said Joseph. Data penetration level standing at 10 per cent indicates the segment is yet to be fully tapped.

In its last financial report, Safaricom said data business contributed Sh2.98 billion up from Sh1.5 billion, representing 3.6 per cent of its total revenue. Safaricom acquired One Communications and Packet Stream to give it a piece of the lucrative segment while AccessKenya bought Open View and Satori Solutions.

These buyouts have not only given the firm the better option of starting from scratch, but have emerged as a threat to rivals, notably the Internet service providers. An acquisition removes the headache of hiring local staff and fighting for market share.

The government has moved to tighten grip on the multi-million shilling telecoms deals with the rollout of new regulations requiring owners of ICT firms to get approval for any planned share sale.

Investors seeking to buy or sell shares in a telecoms firm now have to seek the Communications Commission of Kenya's (CCK) green light in a move aimed at ridding the industry of speculators bent on buying companies with the aim of reselling at a premium.

"A licensee shall require prior written consent of the Commission, which shall notify the applicant of its acceptance or refusal within 30 days of receipt of the request," says the legal notice on the new guidelines. CCK can agree to or veto a buyout deal exceeding 15 per cent, according to the regulations published on May 28.

IGO Wireless is a public data network firm operating fixed wireless data services while Instaconnect is in data integration .

Source: Business Daily

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