By Luke anami
Indian telecommunications company, Essar Group, has announced joint investment plans in Africa with a Dubai based company.
The group, which offers mobile services in Kenya under the "yu" brand name, has entered into investment discussions over the telecommunications portfolio of Dhabi Group’s African assets.
The Essar Group’s move is seen as a strategy to expand its operations in Africa.
"The transaction will involve an equity infusion into these businesses as growth capital and will be the basis of a partnership to create significant presence in Africa," read a statement from the Essar group.
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Standard Chartered Bank has been identified as the exclusive financial advisor to the Dhabi Group.
The Essar’s Telecom Business in Africa recently acquired controlling interest in Econet Wireless Kenya and subsequently renamed the company Essar Telecom Kenya Ltd ("ETKL,").
Further, Dhabi Group and its Chairman, HH Sheikh Nahayan Mabarak Al Nahayan, will lead a consortium of investors composed of private equity and family offices in the East African region.
The Group, which has diversified business interests with a focus on emerging market opportunities in financial services, telecommunications and real estate, has its eyes set on Africa, an upcoming telecommunication market in the recent times.
Other business interests include real estate development, hotels, oil-related services and manufacturing/diversified industrials.
Business interest
It will be recalled that although Dhabi Group and its consortia have banking interests in Asia, its portfolio was expanded in 2005 to include telecommunications services in Asia and Africa.
Essar has significant interests in telecommunications services, spanning mobile telephony, telecom tower infrastructure, telecom retail and IT/telecom enabled services.
The company currently holds a 33 per cent interest in Vodafone Essar, which is a joint venture with the Vodafone Group, and is one of India’s largest cellular service providers, with more than 75 million subscribers.
ETKL launched its services in October last year and is regarded as one of the most innovative and fast growing telecom operators in Kenya.
The company has approximately 400,000 subscribers on its network in Nairobi and Mombasa and expects this number to grow significantly as it completes it rollout across Kenya by end of the year.
When it launched its operations as Kenya’s fourth mobile telecommunications operator, yu’s market strategy has been targeting the youth with attractive tariffs and innovative products and services.
In the process, yu has been able to achieve 70 per cent brand awareness among its target audience.
ETKL has also been successfully operating under a low-cost model that has revolutionised the Kenyan mobile market and enabled it to significantly reduce the cost of mobile communications.
"The company plans to launch several innovative products and services this year," Kunal Ramteke of Essar Telecom Kenya said in a statement.
