Econet pins hope on big cash injection

Private equity investors are talking to Econet Wireless New Zealand about a possible nine-figure capital injection in the New Zealand company.

The South African-based wireless company said it had signed a binding memorandum of understanding with Hong Kong-based GEMS (General Enterprise Management) and CVP (Communication Venture Partners) of London.

Econet said the memorandum signalled the start of due diligence and further appraisal of the regulatory environment in New Zealand, to roll out a nation-wide mobile network.

"It has been five years since we first looked at New Zealand, but now with the expectation of amendments to the 2001 Telecommunications Act to facilitate competition, we can consider becoming a significant shareholder," CVP director Andrew Scott said.

Earlier in the week Econet announced it had appointed "monopoly busting" New York telecommunications lawyer David G Rauscher.

Econet plans to open a fledgling wideband CDMA network to the Auckland public next year and expand it to Wellington, Auckland, Christchurch and Hamilton within three years.

It has been negotiating the use of 3G spectrum gifted by the Government to Maori through investment company and Econet partner, Hautaki.

The company has mobile networks in Botswana, Zimbabwe, Lesotho and Nigeria.

Bill Osborne, Econet NZ's founding chairman and chair of Hautaki, said there was still some way to go before " any real competition has a hope of surviving in New Zealand".

However, once New Zealand was in line with other OECD countries, Maori would be a significant shareholder in Econet's nationwide network, he said.

- NZPA