Nigeria's mobile drive stumbles

Econet was part of a winning consortium for a Nigerian GSM phone licence

By the BBC's James Whittington

Econet Wireless International is one of the more remarkable success stories in African telecommunications.

From its home base Zimbabwe, it has expanded into on of the continent's most important mobile operators.

Last year, it was part of a consortium which won licences to operate second generation, or GSM, mobile phones in Nigeria.

Econet says that it has been unable to take money out of Zimbabwe to meets its funding obligations in Nigeria.

But the rigid exchange controls which operate in Zimbabwe, and prevent money flowing out of the country without government approval, appear to have put this shareholding in jeopardy.

Econet says that it has been unable to take money out of Zimbabwe to meets its funding obligations in Nigeria.

Newspaper reports say that Econet's stake in the Nigerian consortium has fallen from 40% to 5%, although Econet executives would not confirm this.

'Model auction'

Strive Masiywa, the chief executive of Econet Wireless International, has been full of praise for the way the Nigerian auctions were conducted.

"I think you just saw this remarkable exercise that was done in Nigeria, probably the best example anywhere in the world of how to run an auction," he said.

But he is used to dealing with a business-unfriendly government in Zimbabwe.

After winning the first mobile phone licence in his home country he was pursued for year through the courts by the government in Harare who wanted to cancel it.

The problems of funding new mobile phone licences is not unique to Nigeria.

Europe's biggest phone companies are themselves having to deal with ways to finance expensive new licenses.

But in Nigeria, another successful consortium has, because of funding problems, already had to pull out after it was awarded one of the licences.

This withdrawal leaves just the Econet consortium and another group, led by South Africa's MTN, to pay for new networks in one of the world's most under serviced phone markets.