Vodacom into Africa
VODACOM will shake off its shackles and venture fully into Africa once the deal to sell a controlling stake to Vodafone proves successful.
Over the past one and a half years Vodacom has consistently voiced its desire to see a change in the company’s shareholders agreement that restricted it from going into certain parts of Africa.
Vodafone has operations in seven African countries besides South Africa. Five of these operations are Vodacom subsidiaries, a company in which Vodafone has a non-controlling 50percent share.
The shareholders’ agreement prevents Vodacom from competing directly with Vodafone and vice versa.
Vodacom has been held back from venturing too far north while main South African competitor MTN has managed to cover significant markets on the continent and beyond to the Middle East.
This issue was a source of great frustration for retired chief executive Alan Knott-Craig, who made a point of mentioning it during financial report gatherings.
Denis Smit, research director of ICT research firm BMI-T, said: “Going into Africa is definitely on the cards, and the shareholder’s agreement will go away. Vodacom is very capable and will surely look for expansion.”
Vodafone made an offer to buy a 15 percent stake from Telkom’s 50 percent portion with an expected unbundling and listing of the remaining 35 percent on the JSE.
Vodafone has tabled a R22.5-billion offer for the stake , a figure that analysts agree is fair.
Vodacom would not comment on the impact that ongoing talks to sell Telkom to the Mvelaphanda group would have on the Vodafone deal.
A Johannesburg-based ICT broker said: “There’s going to be some uncertainty, but the outcome will all depend on Vodafone’s strategy.
“I would guess that the entire process will be concluded by the first quarter of next year, and I doubt that Vodafone will be making any changes to the current management structure.”
Though the deal might seem unpatriotic, the broker said: “It’s a good deal. With one controlling shareholder, the company will perform better even if there is a smaller stake.”
Analysts agree Vodafone will most likely rebrand Vodacom to suit its global Vodafone branding and consumers will not be significantly affected.
Dopek Pater, partner at Africa Analysis, said: “We might see it listed as Vodafone SA. Vodafone usually wants to take the same strategy, which is to have uniform operations globally, but it won’t be too much of an obtrusion.”
Nielson agreed: “Over time they will change the brand [from Vodacom’s green and blue image to Vodafone’s red markings], but it will happen on a phased approach.”
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