Kenya’s Safaricom to list Sh10b bond for data upgrade

Mergers, Acquisitions and Financial Results

Mobile phone operator, Safaricom, will raise between Sh10 to Sh12 billion in a bond issue to be listed on the Nairobi Stock Exchange. The company said it would split the issue into two, with the first tranche of up to Sh6 billion to be released by the end of next month. Chief Commercial Officer, Peter Arina, said the operator would use proceeds from the bond to expand its data services.

"The company is currently negotiating the deal and details on the exact amount and the timing of the bond will be out towards the end of this month," he said. The second phase of the bond issue is expected to be launched in the first quarter of next year.

Safaricom has already picked Barclays Capital, Absa Bank and CFC Stanbic to arrange the issue. Mobile phone operators are increasingly looking at data service offering, to increase their revenue, having substantially covered the voice market.

The mobile network services cover 83 per cent of the population. Increased competition in the sub-sector has also brought down the average revenue per user to Sh4.473 recorded last year, a 12 per cent decline from Sh5.110 in 2007.

Arina added that the company is geared up for the commercial launch of the undersea fibre optic cable, with Seacom expected to go live later this week.

"We will take about four days of internal testing before making the services available," he said. He added that with its shareholding in the TEAMS and the recently acquired capacity in Seacom, Safaricom will have a capacity of 20,000 megabytes per second (mbps) once both cables go live.

In addition, the company was recently issued with a unified license by the Communication Commission of Kenya, allowing it to offer multiple services using the same technological platform. It also signed an agreement with Jamii Telecom, giving it access to over 1,000 kilometres of terrestrial fibre optic network.

The Standard