Vodacom May be Moving to Buy Nigeria’s 9Mobile

What is however, likely to be Vodacom’s biggest albatross is its South African origins.

By Staff Writer

It seems as if Vodacom is ready to go back to Nigeria and try its luck after leaving Africa’s biggest market in 2004 and dropped plans to invest R1.3 billion.

Nigeria is jewel cellular operators are prepared to fight over because, although the market is still in its infancy, its population of 120 million promises huge returns eventually.

Vodacom, the Vodafone-owned mobile phone operator, has expressed interesting in buying Nigeria’s 9Mobile, according to Nigeria’s THISDAY report, published on Sunday.

The newspaper stated that it authoritatively gathered that BUA Group, Virgin Mobile, and Vodacom amongst other investors, have indicated their interests to invest in 9Mobile and fully acquire the telecoms company.

At the time of posting, Vodacom declined to comment on what it calls “market speculation”.

The company, which was known as Etisalat Nigeria rebranded into 9Mobile, has more than 20 million subscribers and is the fourth biggest operator in the country.

Last month, Etisalat terminated its management contract with its Nigerian business to save the local firm from collapse due to debt and capitulated its 45% stake to a trustee following a regulatory intervention.

South Africa’s MTN is the biggest mobile operator, followed by Nigeria’s Globacom and India’s Bharti Airtel.

Boye Olusanya, CEO of 9Mobile, told Reuters, that the mobile phone operators is open to new investor

Reuters said that Etisalat Nigeria had been in talks with its lenders to restructure a $1.2 billion debt after it missed repayments, but the discussions failed to produce a deal, forcing the banks to step in and order shareholders to transfer their shares to a loan trustee.

Strangely, Vodacom left Nigeria in 2004 after it broke its management agreement with Vee Networks.

The Vodafone-owned telco announced in May 2004 that it was pulling out of Nigeria and had fired Andrew Mthembu, the then deputy chief executive of Vodacom, and two other top executives resigned.

Mthembu’s termination was announced after Vodacom and Vee Networks, previously Econet Wireless Nigeria (EWN), agreed to end a management contract they had signed two months before the termination.

At the time, Willem Swart, who led Vodacom’s operations in the Democratic Republic of Congo and was running EWN, also resigned to join Vee Networks. Robert Pasley, Vodacom’s group strategic director, also resigned from the company.

The break-up then signals the end of Vodacom’s plans to invest up to $150 million (R974 million) to buy a majority stake in EWN.

MTN, Vee Networks, and Globalcom each hold one of three licenses issued by the Nigerian government.

Nigerians are not likely to forget the remarks that Vodacom made about Nigeria many years ago, when it refused to be part of the original bid for GSM licenses, said THISDAY.

The newspaper added that Vodacom’s second adventure in Nigeria, which was aborted by corporate governance breaches may also be a burden, which the company will need to assure and reassure stakeholders especially regulators about.

The newspaper also asked several questions, such as:

What is, however, likely to be Vodacom’s biggest albatross is its South African origins. Is Nigeria ready to embrace yet another South African operator in an industry where a South African operator, MTN, is by far the dominant operator? Is Vodacom capable of shaking off the negative perceptions that Nigerians have about South Africans?



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