Wananchi Group –which offers its services under the Zuku brand, intends to raise Sh8.9 billion ($100 million) next year that it will use to increase the rollout of its services across East Africa region.
Wananchi Group –which offers its services under the Zuku brand, intends to raise Sh8.9 billion ($100 million) next year that it will use to increase the rollout of its services across East Africa region.
The firm offers broadband internet, cable television and voice telephony into one package and at the moment has operations in Kenya and Tanzania but is planning to roll out further in Rwanda and Malawi in the course of next year.
The firm's regional expansion plan will intensify competition with South-African based DStv that has enjoyed a near-monopoly status in the market for the past 15 years, and lays claims to over 100,000 customers in Kenya.
Richard Bell, the firms’ chief executive officer Tuesday told Business Daily that the firm will raise the amount outside Kenya due to the high interest rates prevailing in the country.
“We have invested Sh15 billion ($150 million) to date and intend to raise the extra amount in 2012 which should enable us increase out footprint and also build more cables in Kenya,” said Mr Bell.
He added, “We don’t give specific details of the financial institutions we are talking to or how the money will be spent until the deal has been firmed but definitely some of the amount will be put into the Kenya market.”
Wananchi Group which previous offered its services through cable, recently introduced its services on satellite offering it ability to reach the mass market and also reduce the time of connecting its clients.
In May, Wananchi Group received a Sh5.1 billion ($57.5) million boost from an international consortium of investors, to invest on satellite television services as it expands operations in Africa.
Other than Rwanda and Malawi, Wananchi Group also plans to launch its pay TV service in Ethiopia, Eritrea, South Sudan, Burundi and Somalia.
Liberty Global, one of the world's largest cable companies, Oppenheimer Funds, and Sarona Asset Management, a Canadian-based emerging markets fund manager, raised the amount.
The penetration of pay television in the region has remained low despite the improved telecommunication infrastructure. This is due to high connectivity rates and monthly subscription fees.
However, in the last one year this has been changing with the leading pay television provider Multichoice Kenya introducing its services on mobile devices such as mobile phones and laptops. Last year it partnered with Safaricom and mobile handset manufacturer, Nokia to introduce DStv on handsets at a cost of Sh1,000 per month.
In August this year it also introduced another gadget, drifta that allows subscribers to receive DStv on their laptops at a cost of Sh585 per month. (READ: DStv moves to protect turf with low-cost offering)
It has also introduced a Digital Terrestrial Television pay service and which has not gone well with its rival Wananchi Group who is blaming the industry regulator, Communication Commission of Kenya of favouring the organisation which is 40 per cent owned by the government.
“We applied to offer digital terrestrial television but the reply we have got is that the platform is not yet ready only for the regulator to license MultiChoice,” said Mr Bell.
Wananchi Group is onwed by East Africa Capital partners and in 2009, US-based private equity group Emerging Capital Partners invested Sh2.2 billion ($25 million) in Wananchi.
