Vodacom Completes Gateway Acquisition

[rpm]

Vodacom Completes Gateway Acquisition

Vodacom Group today announced the completion of the acquisition of the carrier services and business network solutions subsidiaries of Gateway Telecommunications SA. This transaction, originally announced on 29 August 2008, has received approval from the competition authorities in South Africa and Tanzania and from the South African Reserve Bank.

 

[portcullis]

This makes life just that little bit more difficult for those of us who manage international VPNs for clients.

Gateway always used to be independent. They used to find the best solution for the client. Now, they'll probably be inclined to provide solutions that somehow make use of Vodacom products or services.

Don't be surprised if some of the ECS licencees build satellite hubs to fill the void.

I suspect the real reason Vodacom bought Gateway is because Gateway have pre-ordered a couple of hundred megabits on a certain Sea cable that will one day run up the east coast of Africa.

Running their international bandwidth over that cable instead of Telkom's cable should (in theory) see Vodacom's variable costs decrease and therefore their nett profit increase.

There's no way the guy on the street will see any benefit from this. Not with users being tied into draconian contracts for up to two years.

Vodacom's savings will probably be enormous. In the same way they would run international bandwidth into their network at Blaauberg, they'll be able to run it into their network in Durban and route it where they want it.

The other advantage of having access to that cable is virtually free access to their networks in places like Mozambique. No doubt this cost saving won't be passed on to the consumers there either...

 

[ambo]

I suspect the real reason Vodacom bought Gateway is because Gateway have pre-ordered a couple of hundred megabits on a certain Sea cable that will one day run up the east coast of Africa.

Are you referring to SEACOM or one of the other vapourware cables? IIRC Vodacom themselves are either investors or anchor clients in SEACOM and your theory seems a little far fetched.

Vodacom's acquisition of Gateway is far more aligned with the activities of Vodacom Business and is unlikely to have any direct impact on Vodacom's consumer offerings. Its called growth by acquisition.

 

[marine1]

And now we know why AKC praised the minister so much

 

[LazyLion]

Are you referring to SEACOM or one of the other vapourware cables? IIRC Vodacom themselves are either investors or anchor clients in SEACOM and your theory seems a little far fetched.

Vodacom's acquisition of Gateway is far more aligned with the activities of Vodacom Business and is unlikely to have any direct impact on Vodacom's consumer offerings. Its called growth by acquisition.

Are you including Seacom in that vapourware category? Because Seacom is far from vapourware. There is actual hard cable lying in the sea as we speak. They are on track for deployment according to their announced schedule. If you search the photo section you can see actual photos of the landing stations and ships laying cable. I am certain that for once we will actually see something released on time as promised in South Africa.

 

[ben dover]

*Yawn*...
i'll believe that when i see it....

 

[vodacom3g]

Are you including Seacom in that vapourware category? Because Seacom is far from vapourware. There is actual hard cable lying in the sea as we speak. They are on track for deployment according to their announced schedule. If you search the photo section you can see actual photos of the landing stations and ships laying cable. I am certain that for once we will actually see something released on time as promised in South Africa.

If you read Ambo's post above you'll notice that he did not include Seacom with the other proposed cables.

 

[kingmonty]

Are you referring to SEACOM or one of the other vapourware cables? IIRC Vodacom themselves are either investors or anchor clients in SEACOM and your theory seems a little far fetched.

Vodacom's acquisition of Gateway is far more aligned with the activities of Vodacom Business and is unlikely to have any direct impact on Vodacom's consumer offerings. Its called growth by acquisition.

Vodacom are neither investors nor anchor clients in the cable. They will, however, be buying bandwidth and capacity to co-locate from Neotel (who have exclusive landing rights in SA) on the Seacom cable.

As for their acquisition of Gateway I agree with your assertion.

 

[dmatthysen]

I suspect the real reason Vodacom bought Gateway is because Gateway have pre-ordered a couple of hundred megabits on a certain Sea cable that will one day run up the east coast of Africa.

Vodacom Business bought Gateway for one reason only...to get a market share in Africa. Gateway has got a big footprint in Africa...