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WARID, Essar deal brings in sh93b

By Vision Reporter

Added 19th November 2009 03:00 AM

WARID will use the money acquired from the partnership with the Middle East-based telecom firm, Essar Group, for expansion, a top official has said.

By David Mugabe

WARID will use the money acquired from the partnership with the Middle East-based telecom firm, Essar Group, for expansion, a top official has said.

The takeover announced on Monday will in the next few months bring in about $50m (about sh93.5b) for network expansion and upgrade, Zul Javaid, the WARID Telecom chief executive officer, added.

The Essar Group acquired a 51% stake in WARID Telecom owned by the Dhabi Group.
Javaid explained that they will utilise Essar’s huge network, expertise and experience to expand into new markets where they do not exist.

“Network purchases are very expensive and because of Essar’s large network, we will be able to access bulk purchases as a group.”

On whether the new deal would have any effect on their market position and subscriber numbers, Zul said WARID crossed the one million subscriber mark last year.

“Every single day we add about 2,000 new numbers onto the network,” said Javaid.
The Dhabi Group and the Essar Group deal covers operations in Uganda and the Republic of Congo.

The agreements were signed by Sheikh Nahyan Mabarak Al Nahyan on behalf of the Dhabi Group and Prashant Ruia, the chief executive of the Essar Group in Abu Dhabi on Monday.

According to a statement from WARID, the enterprise valuation of the Uganda and Congo operations is collectively valued at $318m.

Javaid explained that another 150 base stations would be added onto the already existing 400.

He reiterated that the telecom firm would not re-brand following the 51% stake takeover by the Essar Group.
“Essar wants to capitalise on what has been established by WARID. They will help us grow and will accelerate our expansion plans,” said Javaid.
He said the firm was only awaiting approval from the Uganda Communications Commission to begin the new phase of investments and infrastructure overhaul.

The entry of WARID, about two years ago, did not spark a massive movement of subscribers onto the UAE-based telecom. The market remains dominated by MTN, Zain and uganda telecom as the top three dealers

“The Essar Group has committed growth capital to both telecom operations to facilitate network expansion and marketing. Upon completion, the Essar Group will acquire a majority stake in both their assets.

“WARID has expanded its greenfield operations to become credible competitors and challengers in the market where it operates. The time is now right for the next stage of its growth and evolution,” said Sheikh Nahayan Mabarak Al Nahayan, the chairman of the Dhabi Group.

After the launch of mobile services in Kenya under the brand ‘yu’, Essar Telecom is now expanding its footprint in East Africa with Uganda and the Republic of Congo operations.

Regarded as one of the fastest growing telecom operators in Kenya, Essar Telecom-Kenya has over 600,000 subscribers. It expects this number to grow significantly as it completes its rollout across the country.

Essar holds a 33% interest in Vodafone Essar, which is a joint venture with the Vodafone Group. The firm is one of India’s largest cellular service providers, with over 85 million subscribers.

WARID, Essar deal brings in sh93b

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