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Safaricom to invest $600 million in Ethiopia

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Kenyan operator Safaricom announced, late last week, plans to invest an initial $600 million in Ethiopia, as the telecom company looks to begin moving in its operations within the country following the liberalization of its telecoms sector.

Safaricom’s chief executive Peter Ndegwa has suggested an expense of between $1.5 billion and $2 billion will be needed over the next five years, to meet the license coverage obligations, with break-even in year four.

Nevertheless, he added that this target may be adversely affected by the impact of the current conflict on the launch of operations, which he has suggested will be in mid-2022.

The investment of the $600 million in Ethiopia represents the companies’ contribution to the start-up costs and operating license for which the consortium, that happened late last week, has agreed to pay $850 million in order to help with those requirements, while infrastructure and other costs will also be involved.

The ongoing government conflict against Tigrayan forces and their allies could destabilize progress, with Safaricom evacuating some staff as a precaution earlier last week.  In addition, the sale of a 40 percent stake in state-owned Ethio Telecom and the award of another mobile operator license are also supposedly on the way.

As such, Safaricom monitors around 64.5 percent of the Kenyan market in 2020, with a subscriber base estimated at 35.6 million, according to numbers by Statista.

“Safaricom was the largest mobile telecom operator in Kenya throughout the given period from 2018 to 2020, with a market share of 63.6 percent in the fourth quarter of 2020,” it added.

“Airtel Networks Limited accounted for about 27.2 percent in the same period, making it the country’s second biggest provider of mobile subscriptions,” Statista noted.

The expectations are that the second telecoms provider will start operations in the first quarter of next year at the same time as the government is finalizing legal changes to allow the central bank to issue Safaricom with a license for mobile financial services, a matter that was not included in the initial licensing deal.

Journalist for 8 years in print media, with a bachelor degree in Political Science and International Affairs. Masters in Media communications.

Telecoms

Mexico’s GigNet signs Mera fiber deal

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Mexican operator GigNet, a subsidiary of U.S. firm GigNet, announced a deal to install a private high-speed internet and Wi-Fi network for Mera Corporation, a multinational company specializing in food and beverage concessions at airports and cruise ports.  

Under the deal, GigNet will connect Mera’s corporate Cancun offices to the company’s 18 airport terminal locations.  

In addition, Mera is a private multinational company aimed at compromises of food and beverages with a critical mass within non-traditional places such as airports and cruise ports.  

“Mera Corporation actively seeks operations in the industry of food and beverages where we can add value and increase income. We are operators, concept developers, franchise partners, strategic allies, and restaurant owners,” said Rafael Aguirre, President of Mera Corporation.  

“High-speed data access and efficient communication is a requirement to keep at the forefront of our business. GigNet is a perfect fit to connect our Headquarters operations because they understand what it means for our business to have reliable high-speed Internet,” Rafael added.  

GigNet is the Mexican Caribbean brand of GigNet, a U.S.-based international Digital Infrastructure company. Through its Mexico operating subsidiaries, GigNet, S.A. de C.V., and Sanalto Redes Peninsular, S.A.P.I. de C.V., the Company is a fully licensed telecommunications provider in Mexico.  

Mark Carney, OBE, President of GigNet Mexico, said, “we will be supplying our GigNet enterprise solutions, enabling simultaneous use of cloud and streaming applications that will not only enhance Mera’s already superior customer service but will also improve communication, automation, and the decision-making process for the group’s corporate management team. With this expanded relationship, we look forward to partnering in their growth and continued success as Mera continues to lead the global travel industry.”  

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Vodafone and Iliad discussing merger of Italian units, report finds

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Vodafone and Iliad are holding talks to reach a deal meant to merge their respective units in Italy, according to local reports.  

If an agreement is to be reached, the combined company would be the country’s leading mobile operator, with around 36 percent of the market and nearly $ 1.13 billion in revenues.  

Discussions between the two companies are actively studying ways to clinch a tie-up of their respective businesses in Italy.  

According to the report, Iliad, which is planning to start wireline broadband operations in Italy next week, is working with Lazard Ltd. Still, it’s uncertain if the talks will lead to a transaction.   

As such, the deliberations come as Telecom Italia SpA weighs a $ 12 billion takeover bid from KKR & Co. Meanwhile, Vodafone has recently discovered a potential purchase of Three UK from CK Hutchison Holdings Ltd., Bloomberg News reported earlier on Saturday.    

Iliad, which will make its wireline broadband debut in Italy on January 25, is working with investment bank Lazard (LAZ.N) on its strategic plans in Italy.  

In addition, if the talks were successful, a deal would create a telecoms center with a mobile market penetration of about 36 percent and combined revenues of nearly $6.80 billion.  

It is worth mentioning that Iliad, which billionaire founder Xavier Niel leads, has been reviewing options to further expand in Italy in recent months as it seeks to take advantage of deal fever in Italy’s telecoms industry to accelerate consolidation and cease a price war that has been slashing its margins, the sources said.  

Earlier this month, Iliad’s Italy boss Benedetto Levi said that the French firm was open to buying a rival operator.  

“If a company, as a whole or in part, becomes available on the market we will consider it without any preconception,” he said.  

On Nov. 17, Vodafone’s boss Nick Read said that partnership was needed in Europe, particularly Italy, Spain, and Portugal, where “all players are suffering.”  

The discussions are happening in parallel with Telecom Italia still assessing a $12.25 billion takeover approach from U.S. fund KKR (KKR.N) to make Italy’s biggest phone group private. 

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Lebanese M1 and local partner to proceed with Telenor Myanmar purchase

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After waiting at least six months since it proposed to buy Telenor’s Myanmar unit while the government searched for a local buyer, M1 Group will partner with a Myanmar firm, allowing Telenor to leave the country.  

Telenor uncovered plans in July to sell its operations in Myanmar to M1 for $105 million. However, it’s not clear whether this is still the sum involved.  

As a result of the military coup in February 2021, providing services as a telecoms operator in Myanmar has become more arduous by the day for the company, which is one of the country’s largest operators. The situation soon became unsustainable, with the company putting off their investment in May last year.   

By July, the Norwegian operator had agreed to sell the struggling unit to Lebanon’s M1 Group for $105 million, with the latter suggesting they were ready to invest $330 million into its new venture.   

According to sources close to the matter, Reuters revealed that the new venture would be called Atom. However, the news hub also reported a Telenor spokesperson saying that it is waiting for a response to its application for regulatory approval of the sale.  

Last year, military leaders rejected plans for a sale to M1. At the same time, it has been reported that Shwe Byain Phyu Group will be the majority shareholder of the former Telenor operation.  

Telenor’s exit has been surprising because the new rulers of Myanmar pressured a number of telecoms companies to install surveillance technology.   

That order was complex for Telenor to apply, saying its handover to a new buyer would include all assets, including call data records, following license obligations.  

In parallel, Telenor announced earlier this week that it had signed a new agreement expanding its partnership with Amazon Web Services (AWS).  

Telenor says the deal will help them modernize their website and collaborate in developing private 5G and edge use cases for industries, including automotive, manufacturing, and supply chain logistics. 

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