At the time Strive Masiyiwa was battling to get a license to operate a mobile network in Zimbabwe in the late 90’s, he launched such a network in Botswana. Mascom became his first network operator and the only one that would bear his name: Masiyiwa Communications.
Masiyiwa sold 14% of Mascom in 2004 amidst discontent from minority shareholders of Econet Wireless. He then sold another 44% of the business to telecoms powerhouse, MTN the following year and exited the building.
Why did MTN sell?
MTN was seeking to gain control of Mascom and establish an MTN Botswana. This was never to happen though because of some complicated management contract that gave operational control to Portuguese Telecoms.
This frustration of not getting to slap their branding and to effectively control the MON has led to MTN’s decision to sell and pull out of the business. MTN has said:
Pursuant to this it announced that it would be disposing of its associate in Botswana, Mascom, for $300 million where its lack of control position and MTN branding meant that the group is not able to execute on its BRIGHT strategy
MTN is also selling a number of it’s business units across the continent and beyond. They sold their Cyprus operation for USD 294 million last year. They are also selling one of Africa’s most celebrated e-commerce giants Jumia Technologies of Nigeria. MTN’s CEO, Rob Shutter says:
We are simplifying the group, we are reducing risk, and improving returns. That will generate some returns that will be helpful for our gearing and other priorities.
This makes sense considering that of the 22 African countries MTN operates in and others beyond the continent, 84% of their earnings come from just South Africa, Ghana, Nigeria, Iran and Uganda.
Why is Econet buying?
The buyer of the 53% stake is Econet International Limited which was already a minority shareholder. This is a good move by Econet. There is sense in diversifying markets beyond Zimbabwe and leveraging presence across borders to possibly offer value added services.
At 1.7 million subscribers, Macom has more than 50% of the market share in Botswana. Masiyiwa’s Liquid Telecom also entered the market about a year ago through a partnership with the Botswana Power Company. Mascom could become one of the biggest customers for Liquid Telecom Botswana.
UPDATE: When we published the story we wrote that the buyer was Econet Wireless Zimbabwe. Econet has clarified that the buyer is in fact Econet International Limited.
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