The Comesa Competition Commission has opened an investigation into the proposed acquisition of a controlling stake in Mawingu Networks by a South Africa-based fund, Pembani Remgro Infrastructure Fund II (“PRIF II”).
- •The Fund, through a yet to be incorporated Special Purpose Vehicle (SPV) is proposing to acquire 35% shares of Mawingu.
- •Mawingu, which is incorporated in Mauritius, operates as an internet services provider that offers internet connectivity services such as fixed wireless access and fibre-to peri-urban and rural areas in Kenya.
- •According to the Second Quarter Statistics for the Financial Year 2024/25 from the Communications Authority of Kenya (CA), the company controls 2.8% market share, falling behind market leaders Safaricom (36.1%), Jamii (24%), Wananchi Group (15.4%), Poa Internet (14%), and Vilcom Network (3.2%).
According to Comesa, the parties submitted that the SPV, wholly owned and controlled by PRIF II, will be incorporated specifically for purposes of subscribing for shares in Mawingu. PRIF II is a recently established limited partnership domiciled in South Africa that operates as a close-ended fund.
It is mandated to invest in equity, quasi-equity and equity-related investments in infrastructure (and related industry) companies and projects headquartered in, or whose business or operations are located or conducted primarily within Africa. Within the Common Market, the acquiring group operates in Comoros, the Democratic Republic of Congo, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Seychelles, Swaziland, Uganda, Zambia and Zimbabwe.
The parties submitted that the proposed transaction will not raise any horizontal concerns as there are no overlaps between the activities of the acquiring group and the target group within the Common Market.
They also submitted that there is a limited vertical relationship between the merging parties, as the target group both directly and indirectly procures data centre services from a data centre owned by the acquiring group in Kenya. Specifically, the target group directly acquires cross-connects for links (i.e. interconnection services) from this data centre and sub-leases space within the same facility from a third party (i.e. colocation services).
“These transactions are not significant and will not result in input or customer foreclosure concerns, nor will they affect the competitive landscape in Kenya,” the parties said in their submission.
The regional anti-trust commission will determine, among other things, whether the proposed transaction is likely to substantially prevent or lessen competition in the Common Market and whether the proposed transaction is or would be contrary to the public interest.
Other players in Kenya’s data market include Starlink, Dimension, Liquid, and Vijiji Connect.
