Vodafone Acquires 70% Stake In Ghana Telecom
Vodafone has bought up a controlling stake in Ghana Telecom in a bid to craft an empire in the emergent African market. Seventy percent of the West African country’s third largest mobile service provider and number one in landline communications has been acquired from the Ghanaian government at a cost of £450 million.
With the number of mobile phone users in Ghana increasing at a rate of 50% over last year and only 33% currently owning a phone, Vodafone are looking to capitalise on new opportunities whilst Western Europe is on a downturn. Already having large stakes in telecoms networks in South Africa, Kenya and Egypt, Vodafone is wise to focus on offering a viable alternative in nations whose landline infrastructure is poor.
It isn’t purely exploitative, as Vodafone’s departing CEO Arun Sarin spoke of their commitment to invest over £250 million on improving Ghana Telecom: “Ghana is one of the most attractive markets in Africa, I expect that our investment will generate substantial benefits for Vodafone and for the Ghanaian economy and we are delighted that we will be working in partnership with the government of Ghana.”
Detractors are unimpressed with their business decision to avoid dealing with the market leader MTN, currently the network of choice for 50% of Ghana’s users. However, the prohibitive cost and the circling of other potential buyers has said to have dissuaded Vodafone from considering the firm.
Good news all round for the ailing Ghana Telecom, with their development of broadband installation in full swing and the weight of Vodafone behind them, they could become the jewel in the crown of the company’s African expansion plans.
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