Local telecoms operator, Econet Wireless has acquired Redan Gas. This is according to a report in the Sunday Mail that cites sources close to Econet and from within the energy company Redan. The deal has been highlighted as part of Econet’s plans to expand its footprint in the energy business.
Econet first got involved in energy solutions in early 2011 when Econet Energy was launched. The division has gone on to release products and services under the Econet Solar brand such as solar powered lighting solutions, solar chargers for phones, the Econet Solar Green Kiosks and the Solar Powered Home Power Station. Econet Energy also made investments into wind power solutions back in 2013 through an initiative that was led by Danish wind energy group Vestas
What will Econet’s role be in the LP Gas channel?
It’s been reported that the target market for Econet in this LP Gas investment will be the rural market where the product sold will be a two plate gas stove with a composite cylinder and Econet reportedly has over 20,000 gas cylinders.
It looks like Econet will leverage on its extensive agent network and brand name to push a solution that is becoming more relevant in Zimbabwe. The local power utility, ZESA, continues to be increasingly unreliable and any power solution that offers convenience and makes economic sense will only become more of a necessity than a substitute.
Though this falls under the Econet Energy banner, the investment in gas doesn’t seem to have the same strategic fit for telecoms delivery that that Econet Solar products or the Green Base Stations had. It looks a lot like a smart play for low hanging fruit from an entity that has the reach and resources to do it.
Numbers reported on LP Gas consumption show a big market for the solution, and Econet’s hand in this helps it introduce the rural market to an Eco product that works. There’s also the huge financial opportunity that will go a long way in boosting the performance of the Econet Services division whose numbers relied heavily on EcoCash in the past financial year.
We are told that Redan Gas is supposed to keep its brand autonomy, something that might extend to other services in Redan’s lineup. But I’d bet on an Econet brand being stuck on those composite cylinders.