Vodacom, MTN in race for Madagascar?
South African operators, Vodacom Group and MTN Group are believed to have expressed interest in expanding into Madagascar through an acquisition of Telecom Malagasy SA.
This is according to Bloomberg, citing two people familiar with the matter.
The operators are understood to be interested in acquiring closely-held Telma, to diversify sources of revenue, Bloomberg’s sources said, who asked not to be identified.
Telma, based in Antananarivo, is seeking a buyer, sources confirmed in February. It is valued at about $500 million, one of the people said at the time, and reported by Bloomberg.
Both Vodacom and MTN have expressed an interest to expand into other markets, particularly as South Africa’s mobile market has begun to saturate and domestic voice service revenue declines.
In July, while Vodacom reported a 5.3% rise in active customers to 51.5 million as international operations continued to expand their coverage, its domestic market was less positive.
Vodacom noted that its local customer numbers declined 2.3% year-on-year to 29.282 million, from 29.971 million in 2012. On a quarterly basis, customer numbers improved 0.3% to 29.190 million.
MTN’s South Africa business reported a net loss of 470,000 customers in its quarterly update for the period ending 31 March.
Vodacom, which is 65% owned by Vodafone Group, is planning to expand into three additional countries by the end of the 2014, CEO Shameel Joosub told Bloomberg in May.
Joosub said, however, that the group is only targeting countries in Africa with a population exceeding 10 million, with no ‘major’ operators present, a high GDP, and a low penetration rate (mobile).
Telma competes with India based operator Bharti Airtel and Orange SA in Madagascar and has more than 1.8 million mobile subscribers, or 30% of the market, according to a 2011 corporate review on its website.
“We explore investment opportunities on a regular basis,” Vodacom told BusinessTech, while MTN declined to comment on the matter.
Madagascar has a population of more than 22 million. Its $10 billion economy is forecast to expand 2.6% in 2013, compared with 1.9% in 2012, according to the International Monetary Fund.
Madagascar had 38 wireless subscribers per 100 people in 2011, according to data compiled by Bloomberg.
The news service, however, notes that Madagascar has been in political crisis since 2009 when Andry Rajoelina, a 39-year-old former nightclub DJ, seized power from President Marc Ravalomanana with the help of the Indian Ocean island nation’s army.
The country is scheduled to hold elections on August 23.
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