Is Sa­fari­com en­ter­ing the Ethiopian mar­ket?

Ethiopian broad­caster Esat re­ported sale of 50 per cent of Ethio Tele­com

The East African - - NEWS - By JAMES ANYANZWA The Eastafrican

Sa­fari­com has de­nied re­ports of the com­pany en­ter­ing into the Ethiopian mar­ket.

The Kenyan telco had been said to be gear­ing up for its first ven­ture abroad, with re­ports that it was in ne­go­ti­a­tions with the Ethiopian gov­ern­ment for a stake in state-owned mo­nop­oly Ethio Tele­com.

“We wish to cat­e­gor­i­cally state that we are not en­gaged in any con­ver­sa­tions with Ethio Tele­com on this mat­ter. Any in­for­ma­tion to the con­trary is com­pletely in­ac­cu­rate,” CEO Bob Col­ly­more told The Eastafrican.

Ethiopian me­dia re­ported last week that the gov­ern­ment had opened dis­cus­sions with Sa­fari­com on the sale of half of the shares of Ethio Tele­com. Other re­ports in­di­cated that Sa­fari­com was dis­cussing a mo­bile money part­ner­ship with an Ethiopian bank.

Ethio Tele­com of­fers slow, ex­pen­sive, and un­re­li­able phone and In­ter­net ser­vices.

Kenya’s Prin­ci­pal Sec­re­tary in­charge of ICT Vic­tor Kyalo said he had seen a tweet about the trans­ac­tion.

“It is not clear whether it is Sa­fari­com or Vo­da­com. I tried to check, but no­body seems to know any in­for­ma­tion. If they have, they seem to be guard­ing it,” Mr Kyalo told The Eastafrican. The Kenyan gov­ern­ment owns 40 per cent of Sa­fari­com.

Last week, Ethiopian satel­lite broad­caster Esat re­ported that both the sale of Ethio Tele­com shares to Sa­fari­com and the sale of the Ad­dis Ababa Hil­ton Ho­tel to Ethiopian-born Saudi ty­coon Sheikh Mo­ham­n­med Hussien Alam­oudi, the 159th rich­est man in the world ac­cord­ing to Forbes, were part of the au­thor­i­ties ef­forts to ease the forex crunch in the coun­try and tackle in­debt­ed­ness.

Esat said that Na­tional Bank Gover­nor Tek­le­wold At­nafu had rec­om­mended de­val­u­a­tion of the birr, to in­vig­o­rate for­eign trade and in­flows of hard cur­rency.

Ethiopia is fac­ing a for­eign cur­rency cri­sis as a re­sult of the poor per­for­mance of its ex­ports sec­tor and bal­loon­ing ex­pen­di­ture on in­fra­struc­ture projects.

Spec­u­la­tion about Sa­fari­com’s moves in Africa has in­ten­si­fied since May, when Voda­fone Group con­sol­i­dated its 35 per cent own­er­ship of Sa­fari­com to its African sub­sidiary Vo­da­com Group. At Sa­fari­com’s an­nual gen­eral meet­ing two weeks ago, Mr Col­ly­more said that the own­er­ship changes at the top al­lowed the com­pany to set up shop in un­der­served ar­eas in the re­gion.

“Th­ese changes have freed Sa­fari­com to take the over-thetop ser­vices into other mar­kets,” he said at the meet­ing.

Ac­cord­ing to Mike Mc­caf­frey, an in­de­pen­dent fi­nan­cial tech­nol­ogy ad­vi­sor the deal ben­e­fits Vo­da­com by di­ver­si­fy­ing its port­fo­lio as two of its big­gest coun­tries of op­er­a­tion, South Africa and DRC Congo, face se­ri­ous eco­nomic and po­lit­i­cal in­sta­bil­ity.

Ear­lier this month, Mr Col­ly­more was re­ported by the Fi­nan­cial Times as say­ing that the firm planned to ex­pand out­side Kenya, with east­ern Africa and West Africa on the radar.

“In two to three years’ time we will be in four to five African coun­tries. I don’t think we will step out of Africa be­cause that’s too far and you have lots of other chal­lenges,” Mr Col­ly­more told FT.

When Ethiopian prime min­is­ter Haile­mariam De­salegn vis­ited Sa­fari­com’s head­quar­ters in 2012, he asked for a part­ner­ship be­tween Sa­fari­com and Ethiopia in grow­ing the ICT sec­tor.

Mr De­salegn said that Ethiopia was look­ing to Kenya, Brazil and Pak­istan to de­velop its mo­bile tele­phony mar­ket and lever­age off the ben­e­fits of mo­bile tech­nol­ogy.

At the time, Ethiopia’s Prime Min­is­ter was ac­com­pa­nied by Kenya’s then ICT per­ma­nent sec­re­tary Bi­tange Ndemo, who now sits on the board of Sa­fari­com.

Pic­ture: File

Share­hold­ers of Sa­fari­com fol­low pro­ceed­ings at the com­pany’s an­nual gen­eral meet­ing on Septem­ber 15.

Newspapers in English

Newspapers from Kenya

© PressReader. All rights reserved.