African fund pumps Rs 450 cr into Essar Telecom Kenya

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Mumbai: Essar Telecom Kenya Holdings Ltd (ETKHL), a subsidiary of Essar Telecom Ltd, said Pan African Infrastructure Development Fund (PAIDF) has invested $93.75 million (around Rs 450 crore) in ETKHL to expand East African operations of Essar.

PAIDF is a Pan African fund focussed on investing in and developing infrastructure projects across African nations. It is based in Johannesburg and Tunisia.

ETKHL had recently acquired controlling interest in Econet Wireless Kenya and subsequently renamed the company as Essar Telecom Kenya Ltd. It operates a GSM telephony licence in Kenya under the brand "yu". ETKL launched its services in October 2008.

The company already has approximate 400,000 subscribers on its network in Nairobi and Mombasa and expects this number to grow significantly as it completes it roll out across Kenya by end of the year, a media release said.

Srinivasa Iyengar, CEO of ETKL, said: "We are delighted to have PAIDF, Africa's largest infrastructure equity fund, as an investor in our business. This also signifies the immense value that ETKL has managed to build in a short span of time. We look forward to leveraging our understanding and experience of the telecommunications industry along with PAIDF's regional presence and intelligence as ETKL enters its next phase of network rollout in the Kenyan market."

Tshepo Mahloele, CEO, Harith Fund Managers for PAIDF, said: "The fund is excited about the telecom opportunity and to be partnering with the Essar Group. We are certain that the Essar Group will bring about a landscape change to the mobile telecoms market in the East African region that will extend beyond Kenya. The partnership between the Fund and Essar Group is in line with our strategy of partnering with companies and individuals looking to expand on infrastructure investment opportunities in the African continent."

ETKL has launched its operations as Kenya's fourth mobile telecommunications operator under the ‘yu’ brand. yu's market strategy primarily has been to target the youth with the launch of attractive tariffs, innovative products and services. yu has been able to achieve 70% brand awareness since launch among its target audience.

ETKL has been operating under a low-cost model that has revolutionised the Kenyan mobile market and enabled it to significantly reduce the cost of mobile communications.

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•Essar Telecom Kenya Ltd operates a GSM telephony licence in Kenya under the brand name ‘yu’