Vodacom’s bid to become a major player on the continent has intensified with the announcement that the South African mobile operator, has agreed to buy most of African network and satellite services firm Gateway for $675 million.
According to media reports the deal would boost its presence in Nigeria, Africa’s biggest mobile phone market, and improve its offering of converged communication services across Africa. The deal does not include privately-owned Gateway’s broadcasting business.
The deal will also help Vodacom reposition itself as a provider of converged communication services across Africa, rather than a pure mobile phone operator, the company said.
An international News Agency reported that Britain’s Vodafone, which already owns 50 percent of Vodacom, plans to win control of South Africa’s biggest operator by buying part of Telkom’s stake.
Telkom shares gained 1.87 percent to 142 rand by 0702 GMT, outpacing a slightly weaker Johannesburg Top-40 index of blue-chip stocks.
Gateway is Africa’s largest independent provider of interconnection services via satellite and terrestrial network infrastructure. It provides services to African and international telecom companies.
Gateway also provides end-to-end connectivity services to multinational companies operating across Africa. The deal does not include privately owned Gateway’s broadcasting business.
Gateway’s sales totalled $257 million in the year to end December. Vodacom said it expected the deal to yield cost savings but did not give a figure. The transaction is subject to approval by the South African Reserve Bank and competition authorities. UBS is advising Vodacom on the deal.
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