Econet Wireless Kenya launched operations as the country’s fourth mobile operator at the beginning of December, marking the end of long and twisting journey for the South Africa-based telecoms operator, which was initially issued the licence in 2004. 
It had been suggested that Econet in its own right could not finance the rollout of the network, and was rescued earlier this year by Indian mobile telecoms company Essar Communication, a subsidiary of Essar Global, which acquired a 49 per cent stake in the Kenyan licensee.
Essar acquired the stake from Econet Wireless International, which held a 70 per cent controlling stake in the licensee, and had been reported to be scouting for a suitable financier since the Communications Commission of Kenya confirmed the award of the licence in September 2007.
When Essar acquired its stake in Econet Wireless Kenya, it was reported that the Indian operator would invest as much as US$500 million on the rollout of the GSM network.
The Kenyan operation is branded ‘Yu’, and represents the first expansion outside of India for Essar in the communications sector.
“We thought the Kenyan opportunity was a good one as it combines low penetration with high prices, and high margins,” commented Michael Foley, CEO for East Africa of Essar Communications. “There are incumbent business models in place at the moment and there is an opportunity to reap benefits from improved technology. It is as simple as who has the gold, rules.”
Yu launched with a rate of KES 7.50 (US$0.10) per minute to all other mobile networks, and is offering an additional incentive of paying all Yu subscribers KES 0.75 per minute for receiving calls from the other Kenyan mobile networks. The accumulated bonus airtime will be credited the following month for usage.
Yu has worked with Ericsson as its primary infrastructure provider, with Foley believing that low cost infrastructure is not always the best option for greenfield players in emerging markets such as Africa. He said it took Yu five months to roll out the network in preparation for launch, and that much of the nascent operator’s strategy will be based on automation, a focus on processes, and outsourcing.
The three incumbent operators in Kenya are Safaricom, Zain and Telkom Kenya (Orange Kenya).
1 comment so far ↓
i do really appreciate the works the new mobile operators are doing as kenyans will afford cheap mobile phone calls. yu has started in a good pase, however, much is needed for it to fully recognize the needs of kenyans. it’s only when they understand fully how to tune the minds of mobile users that they will reap the full benefit and we are ready to help them if they are willing.
Leave a Comment