Vodafone already had a 35% stake in South Africa’s largest mobile operator, Vodacom (Pty) Ltd. The other shareholders in the operator are the South African government because it still majority owns the local fixed-line incumbent Telkom SA Ltd, which has a 50% stake in the operator.

The remaining 15% in Vodacom was held by VenFin, but in November Vodafone offered to purchase its holding for approximately ZAR 16bn ($2.41bn). Vodafone has now said its offer for VenFin is wholly unconditional after receiving valid acceptances from holders of 60.8% of VenFin shares.

This deal has led to speculation in South Africa that Vodafone will now seek to ditch the Vodacom brand name, and rebadge the Vodacom service as Vodafone, especially as the roll-out of 3G services gathers pace.

However, Vodafone will have to tread carefully. Although it certainly wishes to acquire a controlling stake in Vodacom, it seems unlikely that Telkom will give up any part of its 50% holding. The problem is that Telkom’s stake in Vodacom is one of its most important and valuable assets, and with the incumbent still being majority owned by the South African government, Vodafone will have a tough fight on its hands to convince the South African state and local regulators.

The deal is part of Vodafone’s strategy to move into underdeveloped markets. At the end of October last year, Vodafone paid INR 67bn ($1.49bn) to re-enter the Indian market when it purchased a stake of just over 10% in Bharti Tele-Ventures Ltd, India’s mobile market leader.

Prior to that, in March 2005 it paid $3.5bn in cash for the Romanian mobile phone group Mobifon SA, and rapidly growing Czech wireless operator Oskar Mobil AS.

South Africa is an attractive market for the Newbury, UK-based operator, as saturation levels are relatively low compared to western Europe. Only 57% of the South African population of 47 million own a mobile phone.

Vodacom is South Africa’s largest mobile phone provider. Its customer base grew by almost 40% in the last financial year, while revenue rose 20%. It has approximately 21.5 million mobile customers spread across its operations in South Africa, the Democratic Republic of Congo, Tanzania, Lesotho, and Mozambique.