{"id":550632,"date":"2006-10-25T07:45:49","date_gmt":"2006-10-25T07:45:49","guid":{"rendered":"http:\/\/localhost:8888\/wordpress\/technology\/550632-the-cellular-race.html"},"modified":"2006-10-25T07:45:49","modified_gmt":"2006-10-25T07:45:49","slug":"the-cellular-race","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/technology\/550632-the-cellular-race.html","title":{"rendered":"The cellular race"},"content":{"rendered":"

This was evident in MTN\u2019s past decision to pay a staggering $5,5bn to buy pan-African and Middle East player Investcom, while Celtel bid $1bn bid for a majority stake in Nigeria\u2019s V-Mobile. <\/font><\/p>\n

So it\u2019s small wonder that Telkom has been so dogged in its determination to alter the shareholders agreement it has with Vodafone, which currently limits Vodacom\u2019s expansion into Africa. <\/font><\/p>\n

Facing an increasingly competitive domestic market and the coming stagnation of the fixed-line business, Telkom will need revenue flow from its 50% stake in Vodacom to help the group grow in future. <\/font><\/p>\n

On the other hand, Vodafone needs to weigh up the risks of hobbling Vodacom\u2019s profit growth by keeping it largely a domestic player against the competitive danger Vodacom would present should it be allowed to expand into Africa. <\/font><\/p>\n

Last year, Vodafone paid an effective R16bn to buy a further 15% in Vodacom from investment company Venfin, increasing its stake to 50%. <\/font><\/p>\n

The potential for conflict between Telkom and Vodafone is big. But timing may be on Telkom\u2019s side. Vodafone, the world\u2019s biggest mobile company by revenue, is having to undergo a strategic shift after posting a $41,2bn loss last year. This was an accounting loss, but it was accompanied by falling margins and lower growth. <\/font><\/p>\n

After pursuing a strategy of global growth and a narrow focus on the mobile market, Vodafone is starting to consolidate its investments and expand its mobile offerings. Its designs on Africa have become muted, and it already has a presence in two key markets \u2014 Kenya\u2019s Safaricom and Egypt\u2019s Vodafone. So it may be prepared to look to Vodacom to take the risks (and hopefully reap the rewards) associated with investing elsewhere on the continent. <\/font><\/p>\n

But it remains unclear whether Vodacom will go this route. CEO Alan Knott-Craig recently declared the acquisition strategy too expensive, and conceded that the operator might have to confine itself to its existing markets. There is scope for growth in southern Africa, and particularly in SA, but Vodacom will find itself facing stiff competition in its attempt to add a wider range of services such as mobile television. <\/font><\/p>\n

It\u2019s too early to predict what will succeed \u2014 MTN\u2019s expensive expansion plan or Vodacom\u2019s more conservative strategy. But the race is on. <\/font><\/p>\n

Discuss this article<\/a> <\/p>\n

\n","protected":false},"excerpt":{"rendered":"

AFRICA and the Middle East are the two big new markets being targeted by the world\u2019s cellular operators. Both are largely untapped, so cellular operators are prepared to pay over the odds for a foothold. <\/p>\n","protected":false},"author":23,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[17],"tags":[],"class_list":["post-550632","post","type-post","status-publish","format-standard","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/550632"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=550632"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/550632\/revisions"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=550632"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=550632"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=550632"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}