MTN, Vodacom in talks over international assets

Bode Adewummi, Lagos - 31.03.2008

Vodafone is reported to have started talks with South Africa’s MTN with regard to taking a stake in the mobile phone operators’ international operations. The South African Business Times reported that the talks started after the government apparently blocked attempts by Vodafone to take a majority stake in its existing partner, Vodacom.

Sources told the newspaper that Vodafone had become increasingly frustrated with delays in a planned sales of 15 per cent of Telkom, which owns 50 per cent of Vodacom.

The sale would have pushed Vodafone’s effective control of the company above 50 per cent, giving it control of the business without having to spend a significant sum on an acquisition.

Vodacom will also need to divest a substantial stake by the end of this year to a Black Empowerment group, further diluting both companies’ stake in the company.

The talks were confirmed by an MTN insider and by an independent source in the South African financial services sector, who is familiar with the detail of the discussions. Although Vodafone denied the story, MTN did confirm that Vodafone was one of several companies they were talking to - as part of normal business relations.