Vodafone buys Ghana Telecom in $900m deal

By Emmanuel Kizito Kasozi Posted 09 July 2008 @ 07:50 pm EET     Print     Reprint     E-Mail     Comments

Kampala (IBTimes.com) - Vodafone UK revealed today that it had reached a $900 million deal with the Ghanaian government for the acquisition of 70 per cent of Ghana Telecommunications Company Limited (Ghana Telecom) in yet another major telecoms transaction trailing last month’s offer of the country’s sixth mobile license to Nigeria’s second national operator, Globacom Ltd.

Click to Enlarge Vodafone customers standing outside the company ...

As companies make a bullish run for the West African nation, with the acquisition by wholly-owned subsidiary, Vodafone International Holdings B.V., the UK operator makes a strategic entry into Ghana on the platform of the country’s leading fixed line service provider, Ghana Telecom that also owns number three mobile operator, One Touch.

It also reached a deal with the Ghanaian government, which retains the remaining 30 per cent of Ghana Telecom, to have the nation’s optical fiber network transferred to the latter.

Both parties are hoping that the deal will be concluded by end of third quarter of the year when it sails through the country’s Parliament, the company said yesterday in a statement.

“Ghana is one of the most attractive markets in Africa with mobile subscribers growing at more than 55 per cent p.a. and mobile penetration around 35 per cent,” said Arun Sarin, Outgoing Vodafone CEO.

“Our extensive operating experience together with our portfolio of products and services position us well to deliver a superior mobile experience to Ghanaian customers and significantly improve financial performance. I expect that our investment will generate substantial benefits for Vodafone and for the Ghanaian economy and we are delighted that we will be working in partnership with the Government of Ghana,” added Sarin.

Technology Times checks reveal that Globacom had also made a bid for the Ghana Telecom’s stakes.

It eventually settled for the $50.1 million license sold to its wholly-owned subsidiary, Glo mobile Ghana Limited, to become the sixth mobile operator. Indications emerging from Ghana are that Egypt Telecom, France Telecom, Portugal Telecom as well as undisclosed bidders from Ghana and India may have also had their eyes on the telecoms company.

For the UK operator, the deal is not only about telecoms alone as it cites recent discovery of oil field in Ghana as some of the strategic rationale for its planned foray to ensure “exposure to the attractive and growing Ghanaian telecommunications market.”

According to the operator, it sees potentials in low mobile telephony penetration in the market where just 2.7 million lines were added last year to an estimated 24 million population that has more than 50 per cent being under the age of 25.

Vodafone also see major turnaround potentials in Ghana Telecom with its majority control of the leading fixed-line operator that recorded 379,000 subscribers at the end of first quarter 2008.

The Ghanaian operator also owns the number three mobile network accounting for about 17 per cent market share and 1.4 million subscribers at the end of first quarter of 2008. Within the same period, it recorded 15,000 broadband lines.