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HIGHLIGHTS
Last month, Vodafone made a non-binding proposal to acquire a 15% stake in the Vodacom Group for a net value of about $2.5bn. The deal became effective on November 6.
The deal would bring an end to arguably one of the most self-defeating agreements in the history of the African telecoms business. We take it as a signal that Vodafone and Telkom will become more aggressive in African M&A, but opportunities are dwindling.
Vodafone’s sub-Saharan African geographic footprint remains narrow, with its markets –outside of South Africa- accounting for only about 20% of projected SSA incremental mobile revenue over the next five years (vs. 60%+ for MTN). Nigeria would change that.
We see two potential pathways for Vodafone into Nigeria:
NITEL –arguably Africa’s worst operational basket case- and CDMA consolidation
– unorthodox, but worth a look.
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