According to local publication Business Daily, the incoming owner might switch Zain’s name to its preferred brand, Airtel, a move that comes just 17 months after the African operator underwent massive rebranding on its own.

“Zain managed to break new ground with its brand because it brought its communication to the local level. Should they re-brand, they would have to maintain that focus or they would lose out to the more localized brands such as Safaricom”, commented Fred Simuyu, the chairman of the Marketing Society of Kenya.

The Indian conglomerate, run by billionaire Sunil Mittal, bid no more than $9 million for the Kenyan operation’s Kuwaiti parent company, Zain Group. If the deal is concluded, the Indian firm will acquire control over Zain’s African operations, including Kenya and expanding further into the African telecoms market.

In 2008, Zain Kenya went through a massive rebranding phase that saw its new brand unveiled in 14 African markets, in an announcement via live satellite. The company then committed to spend Sh25 billion on its rebranded network. However, industry estimates place the cost of the 2008 Zain rebranding exercise at around $28 million.

Surprinsingly, in September last year, Zain was voted first among the top 15 brands in East and Central Africa in an industry survey, alongside Nokia, Omo, Coca-Cola and Colgate, to name a few. The survey was conducted by a panel of SuperBrands independent experts and was based on market dominance, longevity, goodwill, customer loyalty and overall market acceptance criteria.

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.

Source: TeleGeography

Strive Masiyiwa

As founder and chief executive of Econet Wireless he has pursued his ambition of creating a truly African multinational business, spinning a web that spans seven countries, more than 25 million customers and generates an estimated $3bn (£1.8bn) in annual revenues. He has fought his way through Africa’s often tangled legal jungle and had the security forces on his tail – more often than not sitting outside his house.

Next week his legal team will enter a courtroom in the Netherlands to mount the next challenge: throwing a spanner in the works of what could potentially be one of the biggest deals in African history, the $10bn sale of rival mobile-phone operation Zain.

Read the rest on the Guardian website…

Source: Guardian