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Safaricom buys data company for Sh170m

NAIROBI, August 21 – Mobile services operator Safaricom Thursday announced the acquisition of a 51 percent stake in One Communication, a data company that offers wimax services.

Safaricom Chief Executive Officer Michael Joseph told a media briefing that the acquisition, which was worth $2.6 million (about Sh170 million), would complement their mobile broadband service to enable them deliver end-to-end services – mobile, fixed or data – to their customers.

This was the operator’s first acquisition since becoming a listed company.

“It is our first (acquisition) but it will certainly not be the last as we intend to broaden our range of products that we intend to offer across the country,” Joseph added.

He said One Communication would operate as an independent company although Safaricom would offer the financial, human resources and legal backing.

It is estimated that the penetration of broadband services in Kenya is less than two percent.

Joseph explained that discussions on the deal started in 2005 after One Communication got their licence, but the process was delayed by the Safaricom IPO.

“The delay was however an opportunity for us to know more about each other,” he enthused.

The acquisition comes after the successful roll out of Safaricom’s 3G broadband services in Nairobi and Mombasa.

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It also comes a few days after the government gazetted the unified licence framework that aims to streamline licence requirements.

One Communication Group Chief Executive Geoffrey Shimanyula said that they would expand their wimax coverage in major towns around the country to enable Safaricom reach a wide customer base.

“We shall start off with the wimax platform of the wireless technology that will give us the fastest reach without the need for civil works and prerequisite approvals that go with other technologies,” he added.

Shimanyula said that they were currently offering Internet Protocol (IP) services including internet access and private IP.

During the function, Joseph said their subscriber base had increased to 11.1 million customers as at June 2008.

Although he said the company’s board had not made a decision on whether they would release their quarterly results, Joseph said despite the volatile environment earlier in the year, they were able to record impressive performance.

Their money transfer service, M-Pesa, he announced, had transferred Sh6.8 billion in July alone, which was a 220 percent increase over the amount transferred in March, with the customers growing by 50 percent to three million over the last quarter.

He disclosed that other products would be added to M-Pesa to enable users to pay their bills through the service.

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