I meant to post this a while back (like 3 weeks ago when the announcements first started coming out), but this is interesting and relevant for a lot of us playing around in the Ghana telecommunications arena:
Vodafone in Ghanaian mobile deal
http://news.bbc.co.uk/2/hi/business/7487821.stm
Page last updated at 13:41 GMT, Thursday, 3 July 2008 14:41 UK
Mobile phone firm Vodafone is to expand its presence in Africa by buying a controlling stake in Ghana Telecom for £452m ($900m).
I’m not sure what this means. My first question (almost selfishly) was whether Vodafone would continue the program enabling doctors to talk to each other for free on OneTouch lines (courtesy of Brian Levine from NYU and Mr. John Annoh Quarshie from OneTouch). But the larger order questions are ones of management - how much upheaval will Vodafone bring to GT? Will it be more of the same years of mis-management (constant re-organizations, blame shifting, and strategic monopolistic practices aimed towards, well, understandably, maintaining their market control), or will Vodafone use GT’s strategic position wisely and maybe actually stimulate healthier telecommunications growth in Ghana?
Good or bad for Vodacom? Good or bad for Ghana? Well, I personally think it’s a mix. Ghana’s opposition party thinks it’s a bad deal and the parliament blocked approval until the next meeting in October - possibly trying to hold out for Ghana’s presidential elections in November. Their reasons? I don’t know what the real reasons are - maybe Eric O or someone else in Ghana can speak to that - but the article says they want to hold out for more money. I hate hearing that from politicians - but in Ghana who can trust the businessmen to actually strike fair deals? In the long run, though, I think the cash is less important than the change of management (and perhaps the shares), and I don’t know enough about Vodafone to know what tidings this holds for Ghana as a whole. I do think that this is really interesting from the perspective of the multi-national company diving into african mobile market fray. Buying out the entire national monopoly dsl/landline/mobile company seems a bit drastic, especially given GT’s history. But given their progress on DSL broadband provision in the past year, I can’t say this is a bad move. While I was there, they managed to expand to Takoradi, Cape Coast, and Tamale, covering three additional regional capitals within a span of just a few months, and simultaneously wiping out the ISP competition in those markets.
From a mobile communications standpoint, Vodafone’s acquisition of GT might be coming at a good time, closely following the heels of MTN’s recent acquisition of Areeba (formerly known as Spacefon). Jump on the Bandwagon. What the newspaper articles really fail to say, then, is that Vodafone is not just acquiring the mobile division of GT (aka OneTouch, the third largest mobile provider, and sometimes the most reliable, if there is coverage), but Vodafone’s acquisition (if approved by Parliament) would also cover the rest of GT as well. And this is strategic. GT controls the international long distance market, access to the SAT3 submarine fiber link, and most of the DSL broadband market, as well as 90% of the landline market. $900m for a controlling stake in a telecommunications company that serves 22 million people actually would seem pretty cheap, if I didn’t think that the company was in deep need of a management overhaul. Last time I checked, they were months behind on connecting to the Ghana Internet Exchange because they were doing yet-another company re-org, and couldn’t decide who was in charge of it. So I’m undecided on whether this is a fair deal or not for Ghana, but I do think that change might be a good thing!
Anyways.. news of interest, a couple of editorial remarks. We’ll see what happens in October!