Vodafone eyes stake in South African telecom



Global mobile phone giant Vodafone is in preliminary talks seeking a stake in South African-based mobile company MTN's international operations, a newspaper reported on Sunday.


Vodafone, the world's largest mobile phone company by revenue, engaged MTN in pursuit of a multi-billion rand share after the government blocked it from purchasing a controlling stake in rival local phone operator Vodacom, South Africa's Sunday Times reported.


MTN Chief Executive Officer Phuthuma Nhleko had confirmed British-based Vodafone was one of the companies that had approached him, but added he had nothing to report to shareholders, the newspaper said.


"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," said the Sunday Times.


The newspaper went on to say that Nhleko cautiously responded this week to questions about the matter.


"Let me put it this way, everybody talks to us, including them," it quoted him as saying.


"There is nothing of such a nature that would constitute a serious approach or a serious offer to the extent that we would feel compelled to go and table that with shareholders."


MTN unveiled a 17 per cent rise in 2007 adjusted headline earnings per share on Wednesday and said it would boost its subscribers by a third this year as a foray into Iran pays off.


MTN said its customer base swelled by 53 per cent to 61.4 million last year, helped by a strong performance in Iran, and forecast an extra 21.8 million subscribers in 2008.


Adjusted headline EPS rose to 682 cents from 585 cents, which helped boost its stock by nearly 5 per cent.


MTN, which has pursued an aggressive acquisition spree in risky but lucrative African and Middle East countries, said it was actively seeking more expansion opportunities in emerging markets, including outside those two regions.


In an interview with the Sunday Times published on Sunday, Nhleko said he was seeking opportunities in Angola and Senegal, as well as in developing Southeast Asian markets.


An industry source who asked not to be named said that given market dynamics it was highly unlikely that MTN would enter into any talks with Vodafone.


Vodacom, South Africa's largest mobile phone company, is jointly owned by Telkom and Vodafone. It competes with sub-Saharan Africa's largest operator MTN and third-ranked mobile operator Cell C in South Africa.


In January, Vodafone Group Plc said it topped market forecasts with solid third-quarter revenues and held out the possibility of another full-year upgrade.


Revenues rose to £9.2 billion ($18.33 billion, Dh67.27 billion), with organic growth of 4.4 per cent, just ahead of most expectations and similar to the previous quarter.


The company is seeking to accelerate pedestrian growth in its core European markets with greater exposure to faster-growing emerging markets. (Reuters)