MTN buys 60% of UUNET Kenya
Everyone, it seems, has designs on Kenya’s fast growing internet and data services market. Its been reported in this week’s edition of the East African Newsapaper that MTN, which is undoubtedly Africa’s largest telecoms groups has acquired a 60% stake in UUNET Kenya. UUNET Kenya is one of the leading internet and data services companies in the country focussed on small to large businesses. UUNET Kenya is also a major private data network operator (PDNO) using a combination of fixed line and wireless mediums.
MTN has been interested in the Kenyan marketplace for years – since the time when Vivendi exited its investment in what was then Kencell Communications that subsequently was acquired and re-branded Celtel and is currently known as Zain. Thereafter, MTN was one of the bidders for hotly contested Telkom Kenya sale where it lost to France Telecom which has since launched is Orange mobile network in Kenya. Most recently, it was widely reported in the media that MTN had made overtures to acquire a stake in Econet Wireless Kenya which owns the YU mobile network.
The surprising thing about the MTN acquisition of UUNET Kenya is that it appears somewhat unorthodox in that having failed to acquire either a mobile network or telecoms operator in Kenya, MTN has settled for an internet and data services provider. This is a fast growing market in Kenya and could give MTN muscle in areas such as inter-connecting VOIP and other data services via its Pan-African network. At the same time, MTN’s subsidiary in Uganda is dominates voice and data services so clearly it hopes to replicate the same winning strategy in Kenya.
Going forward, what remains to be seen is how MTN, which is renowned for being an innovative telecoms group will penetrate and grow its market presence via the UUNET Kenya acquisition. At the same time, its expected that other major players in Kenya’s internet and data services industry such as Safaricom, Swift Global, Internet Solutions and AccessKenya will respond to the MTN challenge in Kenya. At the end of the day, one thing is for sure, the customer is bound to gain from the increased competition with lower service prices and especially since the SEACOM and TEAMS high speed undersea data cables will become operational starting June 2009.