Vodacom's Congo Shareholder Dispute Goes to Arbitration
Published on: 8th Apr 2010
Note -- this news article is more than a year old.
The dispute between Vodacom and its local partner in the Democratic Republic of Congo (DRC) has deteriorated with Vodacom now initiating arbitration proceedings under ICC rules in Brussels. In a statement, Vodacom said that the shareholders failed to reach agreement on a number of issues including capital restructuring that would support the continued growth of the business.
The dispute is with 49% shareholder Congolese Wireless Networks (CWN). Vodacom owns the remaining 51% of the company, and is the sole provider of capital to the company. Vodacom itself is 65% owned by Vodafone Group.
"Vodacom Group has thus far provided all the funding for Vodacom Congo at commercial rates that were explicitly agreed to by minority shareholder CWN. This funding has allowed Vodacom Congo to build infrastructure that connects more than 3.5 million Congolese and the business now provides direct and indirect employment for more than 6,000 people," said Bob Collymore, Chief Officer Corporate Affairs.
"Vodacom firmly believes in the potential of the business in the DRC and believes that the interests of Vodacom Congo's employees, its customers and the DRC as a whole are of paramount importance. We stand ready to fund further expansion and are hopeful that the arbitration process will bring a positive result."
Arbitration proceedings will be lodged under ICC rules in Brussels with immediate effect.
For the year ended March 2009, Vodacom Congo accounted for 5.3% of Vodacom Group's revenue.
Based on figures from the Mobile World database, the operator ended last September with just over 2.9 million customers - representing a market share of 42%. The country has ten licensed operators, although only five are operational, and one of those (SuperCell) has a negligible customer base.