Kenya’s Safaricom Buys stake in local ISP company
Safaricom has acquired a controlling stake in a Kenyan ISP as it prepares for a serious assault on the data market. Already a leader in voice, where it has a 84 per cent market control in mobile service, the country's leading mobile phone service firm said it would use its first post-IPO acquisition to roll out high speed Internet to companies.
In an agreement signed yesterday, listed Safaricom agreed to buy a 51 per cent stake in One Communications for $2.6 million (about Sh174 million). "This acquisition will help us broaden our product offering from just GSM services to Internet services," Safaricom chief executive Michael Joseph said.
The move presents a strategic entry into data communication as competition in the telecommunication industry hots up with entry of two new players. Telkom Kenya, which is 51 per cent owned by France Telecom, has indicated that its relaunch in the market will target both data and voice, while Econet Wireless is expected to go for low end users, threatening Safaricom's dominance.
Both companies are expected to launch their new services before December this year. Incorporated in 2005, One Communications, has five base stations in Nairobi offering Internet services to corporate clients. "This has been a long journey for us and a dream come true," the ISP's director John Gatharia said of his company's acquisition by Safaricom.
"We expect that on the strength of our investment, One Communications will be in a strong position to access the necessary funding to expand its network and services countrywide," Mr Joseph noted.