PAIDF invests USD 93.75 million (Rs. 450 crores) in Essar Telecom Kenya

Essar Telecom Kenya Holdings Ltd (ETKHL), a subsidiary of the Essar Telecom Limited, today announced that Pan African Infrastructure Development Fund (PAIDF) has invested USD 93.75 million in ETKHL for further investment to expand the
East African operations of Essar.

ETKHL had recently acquired controlling interest in Econet Wireless Kenya and subsequently renamed the company as Essar Telecom Kenya Ltd. (“ETKL”). ETKL operates a GSM telephony license in Kenya under the brand “yu”. ETKL launched its services in October 2008 and is regarded as one of the most innovative and fast growing telecom operators in Kenya. The company already has approx. 400,000 subscribers on its network in Nairobi and Mombasa and it expects this number to grow significantly as it completes it roll out across Kenya by end of the year.

Srinivasa Iyengar, CEO, 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 are committed to build a quality network in Kenya with the objective to offer “Best in Class” experience to our customers. 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, commented that: “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 on the African continent.”

ETKL has launched its operations as Kenya’s fourth mobile telecommunications operator under the yu brand. yu’s market strategy has been primarily to target the youthful segment with the launch of attractive tariffs as well as innovative products and services. yu has been able to achieve 70% brand awareness since launch amongst its target audience. ETKL has been successfully operating under a low-cost model that has revolutionized the Kenyan mobile market and enabled it to significantly reduce the cost of mobile communications.

To differentiate itself from the competition yu has embarked on launching innovative products and services such as Imoved and Eneza electronic top up, ensuring easier communication for its consumers. Imoved enables the consumer who has switched to yu network to alert their friends, family and colleagues that they have switched and what their new mobile number is. Eneza Electronic Top up enables paperless top ups, helping conserve the environment. Several innovative products and services are in line to be launched through the year. With employee strength of 350 people, increased geographical coverage, a clear and reliable network and unrivalled products and services yu is set to take the Kenyan market by storm.