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Vodacom Seeking Expansion Opportunities in Africa

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Vodafone is expected to use Vodacom as its vehicle to expand into developing markets in Africa now that it has secured control of the company. Vodacom CEO, Pieter Uys said that the company is looking to take advantage of falling prices to increase its footprint.

"If you look at the world there aren't many growth opportunities around; Africa is one of them," Uys told the Bloomberg news agency. "All markets in Africa offer potential for consolidation." Vodafone "has committed to use us" to enlarge its sub-Saharan business and "support us" on potential acquisitions, he said.

Vodafone has just increased its holding in Vodacom from 50% to 65%, while South African landline operator, Telkom floated its 35% stake onto the local stock market earlier this week.

Vodacom has operations in South Africa, Tanzania, Lesotho, DR Congo and Mozambique. Through its Gateway Communications subsidiary, it offers satellite services in 40 African countries.

Uys also added that having a sole dominant shareholder would speed up the decision making process as it would no longer have to submit plans to two separate boards for approval. In addition to acquisitions in new markets, there is also the opportunity for consolidation on crowded markets where Vodacom already operates.

In late 2006, Vodafone and Telkom agreed to amend a long-standing shareholder agreement which had blocked Vodacom from investing in operations north of the Equator.

On the web: Bloomberg

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Tags: vodafone  vodacom  satellite  telkom  landline  gateway communications  africa  South Africa  Congo  Mozambique