JOHANNESBURG, South Africa-Econet Wireless is gearing up to become one of the leading cellular operators on the African continent. With Botswana and Zimbabwe cellular operations firmly under its wing, it has recently gained further momentum by winning the privatization license bid in Lesotho and by aiming for a slice of the privatization licenses in the Cameroon and Kenya.
To fulfill the company’s pan-African ambitions, the Zimbabwean company Econet Wireless set up a new subsidiary, Econet Wireless International, in Johannesburg, South Africa, to explore acquisitions of new licenses and the privatization of existing operators.
“The rapid convergence between fixed and mobile cellular means that Econet Wireless would no longer confine its interests to mobile communications. We are looking for fixed, wireless and Internet solutions,” said Econet Wireless Chief Executive Officer Strive Masiyiwa.
“Our vision as a company is not to be a telecoms company, but rather a communications provider, with the customer as the main focus.”
Econet Wireless International is looking at opportunities in its various areas of expertise, with five companies in the group pursuing them. The wireless communications divisions and Internet business unit Ecoweb are each looking for opportunities across Africa. A division called Econet Telecom is looking at fixed-network solutions, while Worldstream, an Internet start-up company, is focusing on African opportunities in addition to recently opening an office in London. Econet Satellite Services will be responsible for building and operating an international network of satellite earth stations, providing traditional services such as international voice traffic, Internet bandwidth, very small aperture terminals (VSAT) and broadcasting services. The division is currently constructing an earth station in the United Kingdom for international traffic and has recently won a license for VSAT in Morocco.
“On the wireless side, we are actively looking for cellular opportunities in several African countries,” said Masiyiwa.
A consortium led by Econet Wireless International earlier this year won a bid to acquire a 70-percent stake in the state-owned Lesotho Telecommunications Corp. (LTC) and the right to another cellular license to be issued early next year to compete with the country’s existing wireless carrier Vodacom Communications Lesotho.
“I believe there is room for a second cellular license in Lesotho. When we were participating in the cellular tender in Botswana, we were asked if any bidders thought Botswana, with a population of 1.5 million, could handle two licenses. I was certain it would and submitted a bid on this very basis,” explained Masiyiwa.
He added that most of the bidders walked away as they thought two operators would not be commercially feasible. Econet initially projected Botswana would have 120,000 subscribers within five years, but scaled that number back to 60,000.
However, in just more than two years, the two operators have more than 170,000 subscribers combined-the highest cellular penetration in Africa. “If this was achieved in Botswana, there is no doubt it will work in Lesotho,” said Masiyiwa, noting the countries’ similarities with regard to size and wireless potential.
Econet has done exceptionally well in Zimbabwe, one of three African countries where the cellular subscriber base exceeds that of the fixed network. The estimated subscriber base in Zimbabwe is 250,000 with Econet holding 55 percent of the market share. Econet has proposed to the government to acquire NetOne, Econet’s largest competitor in Zimbabwe, a move that may take some time to achieve.
Participating in the privatization of the state-owned telecommunications companies in the Cameroon and Kenya are Econet’s next targets. A consortium comprising Econet Wireless International and Eskom Enterprises are joint bidders in the privatization of Camtel in Cameroon and Telkom Kenya Ltd. (TKL).
“We believe in broadband access for upgrading or building new networks in Africa,” said Masiyiwa, noting Eskom Enterprises’ expertise in fiber-optic technologies. “Wireless in the local loop may be a quick short-term solution, but what Africa really requires is to keep up with world trends and that can only be done through broadband access.
Kenya will be the company’s biggest challenge as TKL is the biggest telecom provider outside South Africa and Nigeria. Econet is working with SaskTel of Canada on the project and has pre-qualified as one of six selected bidders.
These recent developments have placed Econet Wireless, after only two years of operations, among the four major players in Africa after Telecel/Orascom, MSI and MTN. That is quite a feat, considering it took more than four years for Masiwiya to roll out the one network in Zimbabwe after endless court cases and legal wrangles.
Meanwhile, South Africa operator MTN plans to capitalize further on the telecommunications opportunities in Africa and strengthen its aggressive stance. Aside from its presence in South Africa, MTN is already active in Uganda, Rwanda, Cameroon and Swaziland.
Irene Charnley, executive director of telecom at parent company Johnnic Group, said MTN contracts will soon be finalized in Kenya and Nigeria, and the group is looking at opportunities in Zimbabwe and the Democratic Republic of Congo.
