Nashua Mobile announced on Monday that the company will be shutting its doors in South Africa as a third-party mobile operator, and that their existing subscriber base will be sold off to mobile operators MTN and Vodacom.
“Nashua Mobile has not renewed its agreements on the terms on which it was appointed as a service provider to MTN and Vodacom which recently expired. Pursuant to the termination of these agreements, Nashua Mobile will sell the relevant segments of its customer base to Vodacom and MTN. Concurrently, Nashua Mobile is also pursuing the sale of its Cell C customer base to a third party. The culmination of these transactions will result in the closure of Nashua Mobile and its operations,” the company said in a statement.
Commenting on the transaction, Mark Taylor, Reunert Executive Director and Nashua Mobile CEO says that the company will now focus on moving their customers over to the other networks.
“This was a strategic decision on our part. Our priority now is to ensure that we maintain our service levels to our customers and that they are migrated seamlessly. We are also working hard to ensure that we minimise the impact of this transaction on our employees and make them a key focus of ours over the next while.”
While it was announced by Nashua Mobile, the deal will only be binding when it gets approved by the competition authorities of South Africa, and could take some time before being concluded.
“The timing of this transaction is subject to the approval of the competition authorities and the successful migration of the Nashua Mobile customer base to each acquiring party. It is anticipated that these processes will take a number of months to conclude,” they said.
Giving reasons for the closure in South Africa, the company said that competition has becoming increasingly fierce and they simply can’t make ends meet.
“For the past several years Nashua Mobile has been trading in a saturated, highly competitive market. It has experienced declining Average Revenue Per User (ARPU) due to lower network tariffs and lower out of bundle spend by customers. These factors have contributed towards declining revenue, returns and cash flow.”
Charlie Fripp – Consumer Tech editor