The acquisition will give Vodafone a 65% controlling stake in Vodacom, which offers services in South Africa, the Democratic Republic of Congo, Lesotho, Mozambique, and Tanzania.
Vodacom has a 58% share of the South African market, Africa’s largest cellular market. Vodacom South Africa launched its 3G network in December 2004; its 3G HSDPA network in March 2006, and its 3G HSDPA 3.6 with HSUPA network in February 2008.
In September 2008, the company has launched the iPhone 3G in South Africa through Vodaworld, Midrand. The iPhone 3G is available to both Vodacom’s prepaid and contract customers in all major cities across South Africa.
Vodacom has acquired the carrier services and business network subsidiaries of Gateway Telecommunications for approximately $675m plus a makewhole payment of approximately $25m in relation to Gateway’s high-yield bond. Gateway is an African independent provider of interconnection services via satellite and terrestrial network infrastructure for both national and international telecommunications companies.
The company has said that Vodafone’s bid has the approval of Telkom, which owns 50% of Vodacom, and the South African government, which owns 38% of Telkom. Telkom will also spin off a 35% stake in Vodacom to existing Telkom shareholders and list the company on the Johannesburg Stock Exchange.
The move continues Vodafone’s expansion in emerging markets with acquisitions in Turkey, India, and Ghana to make up for slower growth in Europe.
