India's BSNL In Talks Over Essar Kenya Stake

India's state-owned BSNL is in talks to take a stake in Essar Group's Kenyan subsidiary as part of previously reported plans to expand into the African market. Citing unnamed officials as BSNL, the Economic Times said that the two companies are in talks over a 10-15% stake in Essar Telecom Kenya.

 

 "Valuations are being discussed. We are doing the due diligence," the official told the newspaper, requesting anonymity. The Essar Group declined to comment

 

A couple of months ago though, Econet Wireless Kenya, which trades under the Yu brand name, refuted media reports that South Africa's MTN has offered US$450 for a stake in the company.

 

In January 2008, Econet Wireless International (EWI) sold a 49% stake in the company to India's Essar Communications Holdings (ECHL). The companies said that the move would significantly benefit Econet Wireless Kenya (EWK), which is 70% owned by EWI, from a rollout as well as product offering perspective. EWI owns 70% of EWK with the balance held by local investors.

 

The network operator was recently reported to have signed up 200,000 subscribers since it launched last November - and is aiming for one million customers by the middle of the year.

 

Figures from the Mobile World database subscriber database reports that Safaricom is the market leader with a market share of 82.3% with Celtel coming in at 17.6%. Telkom Kenya (Orange) has just started a "mobile" type service. The country itself has a population penetration level of 36%.

 

The regulator has recently announced that it will make a second attempt at launching mobile number portability - which traditionally benefits new entrants into markets.