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Friday, 11 July 2008 |
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Does last week’s takeover in Ghana tell us that weight, rather than wisdom, is driving Vodafone’s expansion strategy?
Big UK-based company throws nearly US$1bn at poor African country to buy control (70%) of Ghana Telecom. The once pure-play giant now likes to dabble in fixed-line business: that’s just as well, as this latest transaction buys a 99% share of the Ghanaian fixed market (including 90% of ADSL) and 17% of the mobile market. The latter figure gives it the number three position and 1.4mn cellular subscribers as of March 2008; fixed-line users were 0.4mn at the same date.
Call it a ‘Dick Cheney’ moment: Vodafone cites “significant additional growth prospects from recent oil field discoveries” as part of the “strategic rationale” for the deal.
The target for mobile market share is 25% “over time”. US$500mn will be invested in a national fibre backbone. Vodafone will presumably pay US$350mn of that. On top of the US$900mn for the GT stake. That's US$1.25bn up front according to eminent mathematicians.
Vodafone’s departing CEO Arun Sarin will doubtless count this acquisition as yet another notch on his ever-expanding belt. And if and when his trousers fall down on this and other emerging market plays, he’ll be long gone.
Jim Chalmers
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