Kenya-based Internet Service Provider (ISP) Mawingu has announced the acquisition of Arusha-based counterpart Habari after it raised $15 million (Sh1.9 billion at current rates) as part of its regional expansion drive.
The new financing, a mix of debt and equity, is powered by the Africa Go Green Fund (AGG), which will provide $11 million (Sh1.4 billion) of long-term senior debt, while Infraco Africa and Dutch development fund FMO will pump in a $4 million (Sh0.5 billion) investment.
“This acquisition will enable the company to replicate its wins in Kenya, into Tanzania and East Africa. The primary objective is to scale Mawingu’s affordable home Internet proposition to underserved communities in East Africa by acquiring and growing ISPs in the target markets,” said Mawingu.
Founded more than 25 years ago, the Tanzanian ISP covers seven regions with more than 3,000 users.
Mawingu, on the other hand, fashions itself as a rural and peri-urban ISP operating in Kenya’s 30 counties, serving 38,601 subscribers, which translates to a 2.6 percent market share, according to latest regulatory data.
Put against rivals in the fixed Internet offering, the market share places it at position five after Safaricom, which leads the market at 36.4 percent share, Jamii Telecommunications Limited (24 percent), Wananchi Group trading as Zuku (17.5 percent) and Poa Internet (13.2 percent).
Mawingu CEO Farouk Ramji termed the acquisition as a step towards the firm’s larger goal of impacting a million East Africans by 2028.
“Mawingu has created overwhelming successes in its Kenyan business and we believe the Habari acquisition will provide a robust foundation from which to replicate and scale our successes in Tanzania and beyond,” said Ramji.
“We are excited to be one-step closer to positively impacting one million East Africans by 2028.”
The demand for fixed Internet has surged in recent years, especially following the outbreak of the Covid-19 crisis in 2020 as people lean towards remote work and schools adopt e-learning models.
During the year to June 2024, total fixed Internet subscriptions grew 27.4 percent to 1.5 million up from 1.2 million in June last year, in what the Communications Authority of Kenya (CA) attributed to elevated reliance on digital platforms as well as attractive tariffs from ISPs.
“As at June 30, 2024, total fixed data/Internet subscriptions experienced growth driven by increasing reliance on digital platforms for work, education, healthcare, and entertainment, along with attractive tariffs and special offers from service providers,” noted the regulator in its latest review of the sector.
The market is, however, facing the fear of imminent crowding following the emergence of satellite internet service suppliers, especially after the entry and continued expansion of Elon Musk’s Starlink provision.
“Satellite subscriptions recorded a significant growth of 73.1 percent in quarter four and a 1,955.3 percent growth in the 2023-24 financial year. This growth is attributed to the licensing and subsequent launch of Starlink Internet Services Kenya earlier in the financial year,” wrote the CA.
