Kenyans harvest billions from telecom investments

Inability to raise large sums of money needed to help their companies stay in step with the fast pace of growth in Kenya’s telecoms sector is forcing local shareholders to cede ownership leaving foreigners to dominate the business. In recent months, local investors appear to have blinked at the prospect of being asked to help recapitalise the firms in readiness for the next round of heavy investment in the telecommunications sector. The money required to build networks, forge strategic alliances and market the services is forcing locals to relinquish ownership to deep pocketed foreigners.“These are fairly large deals that require the muscle of larger players to push through. At the same time, the smaller Kenyan shareholders are looking for exit routes to allow them harvest their investments – it’s a good time to sell,” said George Odo, the East Africa managing director of Africa Invest Capital Partners, a private equity firm. Some local investors have taken advantage of these shifts to reap from their investment — thanks to their early entry into the lucrative sector. The biggest exit from the fast-moving and capital intensive industry have however been by businessman Naushad Merali, who has recently diluted his shareholding in Zain Kenya – the country’s second largest mobile phone service provider, Kenya Data Networks and Swift Global. Business Dairy Africa

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Kenyans harvest billions from telecom investments