Econet Wireless Kenya targets one million subs by July

Kenya’s fourth mobile operator Econet Wireless Kenya, trading as ‘Yu’, said it has gained 200,000 subscribers since launch in November 2008 and expects to have one million customers by July this year.

CEO of Econet Wireless Kenya, Srinivasa Iyengar, says the fourth mobile operator will remain the cheapest network in Kenya

Chief executive Srinivasa Iyengar – who replaced Michael Foley after he resigned earlier this month – predicts the operator will easily acquire four to five million subscribers within the next two to three years, with monthly average revenue per user of US$6-7.

"We are the … cheapest (network) in town today and we will be the cheapest forever," Iyengar told local press.

Iyengar added that the operator, backed by India’s Essar Communications, also has a licence in neighbouring Uganda, but no launch date has been planned yet. In Kenya, Yu’s network is still only confined to Nairobi and Mombasa, with a full nationwide network not expected to be complete until August or September.

Market commentators have questioned the feasibility and long term sustainability of Econet Wireless’ operation in Kenya, which launched with US$0.10 calls and aims to acquire customers through its aggressive price competitive tactics.

Safaricom leads the market with 12 million customers and 77.4 per cent market share. Second placed operator Zain, formerly Celtel, launched in 2004 and during that time has struggled to reach its three million customers and 19.3 per cent market share, in a market that has been adequately served by the incumbent. France Telecom’s Orange also launched late in 2008 and announced it had reached 300,000 subscribers.

Last year, India’s Essar Communications purchased a 49 per cent stake in Econet Wireless International (EWI), which is headquartered in South Africa and owns 70 per cent of the Kenyan subsidiary. Econet also has operations in Botswana, Burundi, Lesotho, New Zealand, Nigeria, South Africa, the UK and Zimbabwe, with more than 11 million subscribers.

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