Consolidation Is the Future for South Africa’s Telecom Sector
Paul Harper submits:
Even though merger and acquisitions (M&A) in South Africa were down at least 50% in deal value last year compared with other emerging markets, the telecom sector has seen much activity in the last year, which has also spilled into 2009. A veritable wave of consolidation & a drive towards convergence seems to be the way forward for major players such as Vodacom, Telkom SA (TKG) & MTN Group (MTNOY.PK).
The largest deal in South Africa was Vodafone’s (VOD) acquisition of a further 15% of Vodacom for R22,5bn ($2.3Bn), bringing control along with a total holding of 65%. Telkom as part of the deal will divest the remaining 35% to shareholders. Analysts had feared that Vodafone had paid a premium for this stake, however value can be seen in the continued push for consolidation & a genuine effort to move towards converged services. In late December it was announced that the mobile carrier had acquired African network and satellite services firm Gateway Communications for $700 million. The Gateway transaction includes Gateway’s core carrier and business network units, which provide satellite, business and interconnect services to African and multinational companies in 40 countries, but not its broadcasting division.
Related Topics: Africa, business, carrier, countries, LEC, market, merger, Mobile, satellite, telecom, VOD, voice