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Vodacom snaps up Gateway

James Middleton

August 29, 2008

2 Min Read
Vodacom snaps up Gateway

South African operator Vodacom said Friday it has agreed to acquire most of the assets of pan-African carrier services and satellite firm Gateway Telecommunications.

Vodacom, which is a 50/50 joint venture between Vodafone and local carrier Telkom, is to pay approximately $675m for the firm. The broadcasting businesses held by Gateway are not part of the transaction.

The South African mobile operator said the deal would boost Vodacom’s presence in Africa, especially fast growing Nigeria, and pave the way for future expansion. Gateway’s blue chip customer base would also give opportunity to the marketing of converged fixed and mobile offerings across Africa, Vodacom said.

Pieter Uys, CEO of Vodacom, said: “The acquisition of Gateway reflects Vodacom’s strategy to reposition itself as a leading pan-African provider of communications services and to diversify from its current status as primarily a mobile-centric network operator. We believe that Gateway’s significant presence across Africa will allow Vodacom to tap into the huge potential for growth in business services and connectivity and will enhance our position with multinational corporations.”

The move could also give Vodafone a better foothold in Africa, should it ever see its desire to control Vodacom fulfilled. The UK company has long been seeking to take over the South African JV and has come close on occasion, although talks with Telkom always seem to break down.

However, Nigerian business tycoon Mike Adenuga, may have played a wildcard. Local reports on Friday claim that Adenuga, who owns Nigerian mobile operator Globacom, has proposed a merger with Telkom’s 50 per cent stake in Vodacom.

If the deal were to take place, it would be something of a double edged sword, blocking Vodafone’s chances of taking over Vodacom, but giving the UK firm a bigger African partner in the shape of Globacom, with a strong foothold in Nigeria.

About the Author(s)

James Middleton

James Middleton is managing editor of telecoms.com | Follow him @telecomsjames

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