Vodacom keen on acquisitions, but where?

Mobile operator Vodacom says it is keen to expand its foot print in three new countries by the end of 2014, but analysts are asking the question, where?

Group CEO Shameel Joosub told Bloomberg that Vodacom aims to extend its footprint by acquiring local operators.

Two or three deals “in the next two years would be great,” he said. “There are some good opportunities out there and we are actively pursuing it. We hope to be able to add some acquisitions this year.”

However, in a presentation following the release of Vodacom’s results for the year ended March 2013, on Monday (20 May), Joosub said 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).

Irnest Kaplan, MD of Kaplan Equities, says under such criteria, “its difficult to see where they (Vodacom) will buy”.

Analysts have for years been critical over Vodacom’s limited footprint, especially when compared to rival MTN.

Aside from its headquarters in South Africa, Vodacom has additional networks in Tanzania, the Democratic Republic of Congo, Mozambique and Lesotho, but it is dwarfed by rival MTN Group, which has operations in 21 countries in Africa and the Middle East.

One market which suits Vodacom’s criteria is Ethiopia, which has a monopoly operator, Ethiopia Telecom which has 20 million mobile SIM Card users in a country with a population of 84.7 million people.

“We are all interested in Ethiopia,” Joosub told Bloomberg. “You’d be crazy not be.”

The following table depicts the African countries which may meet Vodacom’s requirements.

African Mobile Operators by country with population over 10 million

Country Population (millions)
Number of operators Operators
Algeria 36.0 3 Nedjma, Mobilis, Djezzy
Angola 19.6 2 Unitel, Movicel (Angloa Telecom)
Benin 10.0 5 MTN Benin, Bell Benin Communications, Libercom, Globacomm, Moov
Burkina Faso 17.0 3 Airtel, Onatel, Telecel Faso
Cameroon 20 3 Camtel, MTN Cameroon, Orange
Chad 11.5 3 Airtel, Millicom, Salam
Cote d’Ivoire 20.2 6 Cafe Mobile , Comium (Koz), Green, Moov, MTN Cote d’Ivoire, Orange
DRC 67.8 6 Airtel, Orange, Congolese Wireless Network, SuperCell, Tigo, Vodacom
Egypt 82.5 3 Etisalat, MobiNil, Vodafone
Ethiopia 84.7 1 Ethio-Telecom
Ghana 25.0 6 Airtel, Expresso, Glo Ghana, Millicom Ghana (Tigo), MTN, Vodafone
Guinea 10.2 5 Orange, MTN, Sotelgui, Cellcom, Intercel
Kenya 41.6 4 Airtel, Safaricom, Orange, Yu
Madagascar 21.3 4 Airtel, Telecom Malagasy, Orange, Life (not yet in use)
Malawi 15.3 4 Airtel, TNM, G-Mobile and Celcom (not yet in use)
Mali 15.8 3 Malitel, Orange, Planor (not yet in use)
Mozambique 24.0 3 Movitel, Vodacom, mCell
Morocco 32.2 3 Maroc Telecom, Inwi, Medi Telecom
Niger 16.0 4 Airtel, Sonite, Moov, Orange
Nigeria 162.4 9 Airtel, Etisalat, Globacom, Starcomms, MTN Nigeria, Mtel (NITEL), Visafone, Zoom, MultiLinks
Rwanda 10.94 3 MTN, Tigo, Bharti Airtel
Senegal 12.7 3 Expresso, Orange, Tigo
South Africa 50.5 4 MTN, Vodacom, Telkom Mobile, Cell C
Sudan 34.3 5 Canar, MTN, SMTC, Vivacell, Zain
Tanzania 46.2 7 ZanTel,Vodacom, Airtel, Benson Infomatics, Sasatel, Tigo, Tanzania Telecommunications
Tunisia 10.67 3 Tunisie Telecom,Tunisiana, Orange
Uganda 34.5 6 MTN, Airtel, UT Mobile, Warid, Orange, Essar
Zambia 13.47 3 Airtel, MTN, Zamtel
Zimbabwe 12.7 3 Econet, Telecel Zimbabwe, TelOne

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Vodacom keen on acquisitions, but where?