Mergers, Acquisitions and Financial Results

Econet Wireless International (EWI) seems to be attracting attention on all fronts:

• South Africa’s Altech is in talks with Econet Wireless International. Public speculation is inevitably over finding finance to action its shareholding option in Nigeria but Econet maintains the two have nothing to do with each other. Vodacom is one of Altech’s big suppliers, through subsidiary Autopage Cellular. Altech is also in the process of buying Nampak smart card business NamITech, which sells largely to the telecoms companies. But both Altech and Vodacom insist they are still good friends.

• EWI says it will raise its stake in the third mobile operator in Kenya to 51 from 10 per cent. The Kenya National Federation of Co-operatives has failed to raise its end of the investment but is nonetheless mad at EWI for stating the obvious. An EWI source told the Nation:”The Nigerian experience has taught us a lesson; we don’t want that to happen to us in Kenya. This is why we’re requesting to be given a 51 per cent stake.”

It is clear to any objective outsider that one of EWI’s former “cash cows” - its Zimbabwean operation - has been squeezed by the state of the economy there. If the company is to continue expanding it will need to go the market or find a sympathetic cash-rich partner. Also if it wins its various court battles over its Nigerian operation, it will need to cash there. Vodacom and MTN look like coming out as the victors of this pan-continental mobile sector fight. But it would be wrong to count out the underdog EWI.