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Vodacom Buys African Telecoms Interconnection Service Provider

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South Africa based Vodacom, which is 50 50 owned by Vodafone and local landline operator, Telkom has agreed to acquire the carrier services and business network solutions subsidiaries of Gateway Telecommunications for an enterprise value of approximately USD675 million plus a makewhole payment of approximately USD25 million in relation to Gateway's high yield bond.

Commenting on the transaction, Pieter Uys, Chief Executive Officer designate of Vodacom Group, 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."

Gateway is Africa's largest independent provider of interconnection services via satellite and terrestrial network infrastructure for both African and international telecommunications companies. Gateway also provides an extensive range of end-to-end connectivity solutions to multinational corporations operating across Africa.

The company particularly noted the increased access to the Nigerian market the acquisition brings.

Gateway employs approximately 350 employees in 17 countries throughout Africa and Europe. For the year ended 31 December 2007, Gateway's sales were US$257 million.

The broadcasting businesses held by Gateway Telecommunications (Pty) Ltd (Gateway Broadcast Services Group) are not part of the transaction and will be retained by the current owners.

Vodafone is currently bogged down in long-winded negotiations to increase its holding in Vodacom to a majority (but not total) stake.

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Tags: wind  vodafone  vodacom  satellite  telkom  interconnection  South Africa