Econet in bid to block Zain Nigeria sale

18 Jun 2009

According to IT News Africa, Econet Wireless Group (EWG) of South Africa has started moves to block the sale of Kuwaiti-based Zain’s interests in Zain Nigeria until a ruling on a dispute over ownership of the company is passed. Last week media reports indicated that the Zain Group, a mobile telecoms company with operations in 22 countries in the Middle East and Africa, may agree to a deal to sell its African operations to French company Vivendi for up to USD12 billion.

According to TeleGeography’s GlobalComms database, Zain Nigeria was founded as Econet Wireless Nigeria (EWN) in 2001, named after the South African holding company Econet Wireless International (EWI) which held a 5% stake and a contract to run the cellco. Following a takeover attempt by Vodacom of South Africa in 2003, a protracted boardroom dispute ensued, with EWI unwilling to relinquish its stake or its management control. Eventually in 2004 EWN was renamed Vee Networks and its brand name changed to Vodacom. Barely six weeks after taking over the cellco, Vodacom pulled out of its contract and walked away from Vee Networks, citing ‘irregularities’ in the payment of the brokerage fees. Management of the company was handed to Dr Gamaliel Onosode, of the Delta State Ministry of Finance, and services were rebranded again, this time under the V-Mobile banner. Celtel International, a division of Zain, purchased 65% of the company in May 2006. EWI has since surfaced to try and gain a court ruling to overturn the sale to Celtel, claiming its pre-emption rights were breached when its predominantly Nigerian partners decided to sell their shares in V-Mobile to Zain in 2006.