Econet offloads Rainbow Tourism Group – hopefully to focus on core business

 

According to a press release we received on Thursday afternoon, Econet Wireless has sold its shareholding in Rainbow Tourism Group (RTG).

 

A senior Econet Wireless Group Executive, Tracy Mpofu, confirmed the sale. Techzim believes this is a progressive move on the part of Econet as it should be focused on improving the quality of its network. While it is good that Econet Capital has been playing an investor role in the local financial markets, it has not benefited Econet Wireless nor public investors but actually damaged its brand equity.

 

The RTG investment, like the Renaissance one has been caught up in very controversial scenarios that have raised a lot of questions about Econet’s own credibility. In this context, Mpofu’s remarks were very surprising as she described such controversies as “petty” and “not worthy of a response”.

 

Some Operators on the continent have used their investment units to invest in strategic concerns such as value added startups instead of going into traditional sectors. Safaricom’s M-Pesa is a case in point with $8 billion having been transferred in Kenya alone during 2010. As of March 2011, 13.8 million people were using M-Pesa in the country, it is now expanding internationally.

 

In this regard it would be ideal for Econet Capital to have a dual mandate which is to do what it already does and also invest in value added telecoms businesses. According to Airtel Africa’s 2011 Q4 finanical reports only 13.8% of Africans have access to value added mobile services, thus creating a huge void to be filled. Besides VAS, Econet also has the scale and the capacity to develop its own range of tTablet pcs, smartphones and other similar devices through its technical partners.