Safaricom buys second WiMax provider

A year after Safaricom paid US$2.6 million for a controlling share in WiMax provider One Communication, it is raising its stake in the mobile technology by paying an undisclosed fee for Packet Stream Data Networks.

Packet Stream offers WiMax services like One Com, but has a wider footprint in Kenya. Safaricom, a leading mobile provider in Africa, has made One Com a department within the company. Packet Stream has a footprint in major Kenyan towns, with 300 clients in Nairobi, Nakuru, Mombasa and Eldoret.

The deal, which is awaiting approval from the Communications Commission of Kenya and the Monopolies Commission, has increased Safaricom's market share in the voice and data markets.

"This acquisition is very strategic to Safaricom as it will serve to widen our already growing WiMax footprint and enable us achieve our goal of providing our customers with a ubiquitous data network over a multiplicity of technology platforms," said Michael Joseph, Safaricom CEO.

As Joseph predicted last year, the Unified Licensing regime effected by CCK in 2008 has played a major role in Packet Stream's acquisition. The Unified Licensing regime allows Safaricom to provide converged services without paying separate licenses.

The acquisition comes after Safaricom signed a fiber-optic infrastructure sharing agreement with Jamii Telecommunications.

"The Packet Stream deal will be a natural complement to our relationship with Jamii as it will allow us to now offer a hybrid of last mile connectivity solutions tailored to the needs of our customers. We are the only telecommunications company in Kenya which can today offer to Kenyans broadband services on 3G, WiMax and fiber," Joseph added, at a press conference.

"Safaricom agreed to absorb the 25 employees and about 300 clients; they have bought us out so we will belong to them," said Edwin Wambugu, Packet Stream director.

The new acquisition will form one of Safaricom's avenues for marketing its capacity on the East Africa Sub Marine System (TEAMS) cable and the extra capacity purchased on the SEACOM cable.

Although Telkom Kenya, Kenya Data Networks, Wananchi Group and Access Kenya have invested heavily in data technology, Safaricom has outmuscled them and is threatening to dominate the data market like it has done with voice.