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Safaricom to consider Huawei as supplier for 5G network

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Safaricom Acting CEO Michael Joseph. FILE PHOTO | NMG

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Summary

  • Safaricom will consider awarding a contract to China’s Huawei as it rolls out its 5G network this year.
  • Acting CEO Michael Joseph said Safaricom would follow guidelines from its two main shareholders, South Africa’s Vodacom and Britain’s Vodafone.
  • Involving Huawei in Safaricom’s 5G network could hamper talks on a free trade agreement between the United States and Kenya, which were announced this month, analysts said.

Kenya’s biggest telecoms operator Safaricom #ticker:SCOM will consider awarding a contract to China’s Huawei as it rolls out its fifth generation (5G) network this year, its acting chief executive said Wednesday.

The United States government has been urging its European allies and others not to use Huawei, one of Safaricom’s network vendors along with Nokia, citing security concerns.

“We will use Huawei in 5G ... What will we do in terms of the American statements about not using Huawei? We don’t have that situation in Africa,” Acting CEO Michael Joseph said.

Involving Huawei in Safaricom’s 5G network could hamper talks on a free trade agreement between the United States and Kenya, which were announced this month, analysts said. “They would have to figure a way of working it out just the same way that the UK is trying to figure it out,” said Eric Musau of Standard Investment Bank in Nairobi, after Britain said Huawei could have only a limited role in its 5G network.

Mr Joseph said Safaricom would follow guidelines from its two main shareholders, South Africa’s Vodacom and Britain’s Vodafone. “There is demand for more and more bandwidth, more and more speed,” he said, adding that 5G services network would first be offered to customers in major cities where demand was highest.

Safaricom, Kenya’s largest telecoms company, saw web data revenue grow fourfold over the five years to Sh38 billion, surpassing sales growth from voice business.

The 5G service is a central part of its attempts to further expand its data business to counter slower growth in voice calls revenue.

But Safaricom subscribers who want to use the service will need to acquire new handsets that are compatible with 5G before they can enjoy the superfast Internet, which offers much faster data download and upload speeds that ultimately ease network congestion.

Safaricom’s net profit for the six months through September jumped 14.4 percent to Sh35.65 billion on strong M-Pesa and mobile data revenue growth that offset a decline in voice and messaging (SMS) revenues.

Separately, Safaricom said it planned to expand into Ethiopia, which has promised to open up the state-run telecoms industry. Two operating licences are expected to be offered.

Joseph said Safaricom was putting together a consortium for its bid, The group would include Vodacom, Vodafone, financial capital investors and other unnamed operators, he added.

Joseph, who has been interim CEO since July, will hand over to full-time appointment Peter Ndegwa on April 1.