Econet seeks to expand in Africa

Johannesburg, 30 Jun 2005

Econet Wireless International (EWI), which already has operations in Kenya and Zimbabwe and is involved in a long-running dispute in Nigeria, claims it is looking at moving into at least a couple of other African nations soon.

According to EWI`s head of media relations, Sure Kamhunga, the African market is an exciting one and the company is therefore looking at potential investments throughout the continent.

"EWI is actively focusing on a couple of opportunities that have been offered to us, although at this point it would be premature to specify which countries," he says.

"It is almost as if there is a scramble for a piece of the African pie, and we do not want to be left behind, but we are also aware that we need to focus on the opportunities that are best for us.

"The strict regulatory environment in Africa is the biggest challenge and could be considered a major barrier to entry for the impassioned investor like ourselves, but we have both the experience and the tenacity to stick it out and succeed," says Kamhunga.

VMobile case continues

Meanwhile, the company says it hopes to hear whether the same arbitrators will be reappointed to rule on the issue of its dispute with VMobile in Nigeria by the start of next week.

Kamhunga says it is up to the new judge selected to oversee the process as to whether the same panel of arbitrators will be used, or whether an entirely new panel will be appointed.

The arbitration is part of a long-running dispute between EWI and VMobile (formerly Econet Wireless Nigeria), triggered - according to EWI - by VMobile`s decision to sell a 51% controlling interest in the business to Vodacom SA. EWI claims it had preferential rights to those shares.

The dispute has gone before the UN`s Permanent Court of Arbitration (PCA) which has since referred the matter to a new panel, which it said must be appointed by a Nigerian judge, without considering the merits of the case.

"We have asked the judge to appoint the same panel as before, in order to speed things up, as they have already heard the various arguments, whereas a new panel would have to start from scratch," says Kamhunga.

"EWI is of the opinion that if a new panel has to be chosen, the process could be delayed for up to a year, which would not be good for either of the parties, as the issue to be considered by the arbitrators concerns pre-emptive rights, meaning no third-party can acquire shares in VMobile until this matter has been resolved."

Kamhunga says, however, that EWI has confidence in the effectiveness of the Nigerian legal system when it comes to dealing with the merits of the case.

VMobile expands network

Meanwhile, in Nigeria, VMobile has announced that it will invest a minimum of $2 billion in its network infrastructure within the next 24 months for its quality and coverage expansion initiative code-named Project ROSE, which stands for 'Rolling Out Service Everywhere`.

According to spokesman Emmanuel Otokhine, the investment will be used to build at least 3 000 base stations around the country and expand VMobile`s network capacity to accommodate a minimum of 10 million subscribers.

"Project ROSE entails the construction of additional 4 000km of microwave transmission backbone within the next 24 months, to complement the existing 1 500km and the additional 2 000km expected to be completed in the next six months," says Otokhine.

"VMobile will also increase the number of switches in the company`s network from 16 to 28, to create adequate capacity for the 10 million subscribers expected by June 2007, with the core network capacity being upgraded from 4 million to 6 million active subscribers by end-July."