Vodacom

Vodafone seals Vodacom deal, but faces new competition

Paul Rasmussen — Fri, 10 Oct 2008 10:47:12 -0400

After months of speculation Vodafone has acquired control of the South African-based Vodacom for US$2.48 billion. The investment gives Vodafone control of South Africa's biggest mobile operator, together with a vital foothold in booming African markets and signals its intent to keep pace with its rival Orange where France Telecom's emerging markets play is concentrated.

If the deal goes ahead, which would see Vodafone owning 65 per cent of operations in South Africa, Democratic Republic of Congo, Lesotho, Mozambique and Tanzania, the company could face increased competition from its former parent, Telkom South Africa.

Up until now Telkom's shareholder agreement limited its ability to offer mobile services. However, this could now change with a new shareholder dispensation enabling Telkom to target the rapidly expanding market for broadband and mobile data services.

Commenting on the acquisition, John Delaney, research director at IDC, said that the investment was an indication that Vodafone's new CEO, Vittorio Colao, was evidently intent on maintaining the momentum in Vodafone's drive to spread the red rectangle around the globe.

For more on this story:
- go to telecoms.com

Related articles:
Vodafone in bidding war for South African Telkom. Vodafone story
Emerging markets too pricey, says Vodafone chairman. Vodafone story

Vodafone's African ambitions threatened

Paul Rasmussen — Fri, 29 Aug 2008 11:15:00 -0400

Having been successful in acquiring a majority holding in Ghana Telecom--despite very public protests, Vodafone's objective to acquire control of the giant South African-based operator Vodacom has been challenged by a fresh bidder.

While details remain sketchy, and possibly questionable, Nigeria's second national operator, Globacom, is reported to have tabled a bid to create a 140 billion (SA Rand) pan-African telecoms firm labelled ‘Vodaglo'.

Telkom South Africa, the controlling holder of Vodacom shares (Vodafone holds a 50 percent stake), would only say it had been approached by "companies interested in one or more components" of its business and was not in any talks beyond those already disclosed--presumably a reference to Vodafone and South Africa's Mvelaphanda Holdings.

Globacom has around 12.5 million subscribers in Nigeria and also operates in Benin and Ghana. Its biggest competitor is South African-based MTN--the biggest provider in Nigeria.

While it would appear unlikely that Globacom has the muscle to successfully mount a bid, it might just attract Vodafone's attention to make a reverse takeover of the upstart Nigerian operator given the company's failure to make an acquisition in Africa's most populous nation.

For more on this story:
- go to ITWeb and Telegeography

Related articles:
Vodafone in bidding war for South African Telkom. Vodacom story
Emerging markets too pricey, says Vodafone chairman. Emerging markets viewpoint

Emerging markets too pricey, says Vodafone chairman

Paul Rasmussen — Wed, 30 Jul 2008 10:31:29 -0400

Having reported disappointing performances from its highly-penetrated European markets, Vodafone was able to salvage its reputation with strong growth from its investments in developing markets such as Turkey and India. However, the company's chairman, Sir John Bond, stated this week that breaking into these fast-growing countries--naming Russia and Brazil as potential targets, was proving to be increasingly difficult. "There is nothing for sale, and it would be a big challenge for us to agree to a price that would be beneficial to the shareholders. We find price expectations in these markets are quite high."

However, Vodafone's new CEO, Vittorio Colao, clearly wanted to follow his predecessor, Arun Sarin, by focusing on emerging markets with the hope that a deal could be struck shortly to acquire a majority holding in South Africa's Vodacom. The likelihood of this coming to fruition has moved closer over the last few days with the announcement from Vodacom that it has signed an agreement to bring on board a number of black investment groups as part of the country's move to increase black economic empowerment. Vodafone would have to have added black investors to its deal and Vodacom's move means any deal should progress more smoothly, with the new investors retaining their shareholdings.

Speaking about the financial difficulties consumers are facing, Colao said that these economic challenges will need to be understood and new initiatives launched. "I don't think these issues will slow us down, but times change and we need to do things slightly differently. If families feel constrained we are going to give more SIM-only deals, lower prices, maybe less fancy handsets and maybe the handset renewal times will be pushed a little bit further."

For more on this story:
- go to the Financial Times and Guardian

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Orange looks to expand into emerging markets. Orange story
Spain disappoints, but emerging markets boost Vodafone. Vodafone story

Vodafone in bidding war for South African Telkom

Paul Rasmussen — Thu, 10 Jul 2008 14:02:05 -0400

Until yesterday, all seemed to be going according to plan with regard to how the remaining shares of Telkom, the South African state-owned fixed and mobile operator, would be privatised. The plan was for Vodafone to acquire control of Vodacom, Telkom's mobile arm in which Vodafone all ready has a significant shareholding, while Mvelaphanda Holdings would purchase Telkom's fixed line element. But this comfortable arrangement has been shot to pieces by the news that both companies have made bids for the whole group, with the ultimate aim of owning Telkom's Vodacom stake.

Analysts believe that the two bids, which are unsolicited, are structured in a similar manner. There is also speculation that a third party, in the shape of local businessman, Barend Hendricks--with the backing of ANC leaders, might make an offer to buy a smaller portion of Telkom. Vodafone will not want to enter a protracted and costly bidding war--the on-going saga surrounding the bids for MTN is a leading example, having made what appears to be a successful acquisition of Ghana Telecom and currently negotiating to purchase a stake in Nigeria Telecom.

For more on this story:
- go to Moneyweb

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