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Vodacom opts out of Telkom's Nitel bid

Posted by By Stewart Bailey on 2005/10/24 | Views: 503 |

Vodacom opts out of Telkom's Nitel bid


Vodacom Group, Africa's second-largest cellular company, would not join Telkom in bidding for Nigerian Telecommunications (Nitel) because it did not want to invest in a fixed-line business, it said last week.

Johannesburg - Vodacom Group, Africa's second-largest cellular company, would not join Telkom in bidding for Nigerian Telecommunications (Nitel) because it did not want to invest in a fixed-line business, it said last week.

Vodacom was still willing to manage M-Tel, Nitel's cellular unit, and would consider buying a stake in that division only, the company said. Vodacom said last year that it would join Telkom to seek a 51 percent stake in the state-owned Nigerian company.

"Vodacom remains open to an equity investment in Nitel's mobile business should the opportunity arise," the company said. It "will consider managing the mobile operation of Nitel in the absence of an equity investment if requested to do so by Telkom".

Nigeria has 10 fixed-line operators and four cellular companies, including MTN, Africa's largest cellular operator, serving its population of 137 million. The government was to have chosen the winning bidder for Nitel from six contenders, including MTN, by year-end, it said last month.

Vodacom, which is 50 percent owned by Telkom, said last week that it had exceeded 16 million customers in South Africa, its home market. It is now seeking growth elsewhere as competition at home increases.

Telkom would proceed with its bid, Lulu Letlape, a company spokesperson, said by phone from Pretoria. It was in talks with "various partners" to join in the bid, she said, without naming them. The decision to withdraw from the bidding for Nitel does not mean the end of Vodacom's ambition to tap Africa's biggest market.

It is still bidding for a controlling stake in V-Mobile, Nigeria's third-largest cellular operator, in partnership with billionaire Richard Branson's Virgin Group.

Nigeria's telecoms industry is the country's second-biggest source of foreign investment after the oil industry. MTN said in August that the number of cellphone users in the west African nation had the potential to more than double from the current 12 million.
Telkom shares fell 1.15 percent to R120.10 on Friday.

- Bloomberg

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