Vodafone buys into Ghana
03 July 2008
Vodafone buys into Ghana
Still recoiling from its failed bid for TeliaSonera, France Telecom was struck another blow on Thursday as Vodafone picked up a controlling stake in Ghana Telecom, which the French firm was known to be eyeing.
Vodafone, the world's largest operator in terms of revenue, said that it has agreed to acquire 70 per cent of that Ghanaian carrier fro the local government for a total of $900m. The government will retain the remaining 30 per cent.
Vodafone said the privatisation move values the operator at around $1.3bn and gives the operator access to one of the remaining attractive markets in the region.
Ghana has a population of 24 million, of which more than 50 per cent are under the age of 25. The country has a relatively low mobile penetration at around 35 per cent, and Ghana Telecom as the number three player own about 17 per cent of the market with 1.4 million customers. Not forgetting that the carrier is also the market leader for fixed line and broadband with 99 per cent of the total number of lines and 90 per cent of the retail ADSL market.
These are also the reasons why France Telecom was also known to be interested in the stake, although the company may have reined in its acquisition activity after the TeliaSonera fiasco.
Still, the acquisition looks like it might be a final feather in the cap for outgoing Vodafone chief Arun Sarin who steps down at the end of this month. "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. 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," he said.
Sarin said that over the next five years Ghana Telecom is to invest over $500m in its operations and network, restoring and expanding network coverage and completing and integrating the fibre backbone, as well as introducing initiatives such as M-PESA and ultra-low cost handsets.
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