(Bloomberg) -- Vodacom Group Ltd. is in discussions with France’s Orange SA about a strategic partnership in Africa to explore infrastructure deals to help keep down costs on the continent, people familiar with the matter said.  

The telecommunications companies are looking at agreements in overlapping markets including Egypt and the Democratic Republic of Congo, and reviewing where there are other opportunities to work together, said the people, who asked not to be identified because the discussions are private. 

The talks involve potential agreements to share infrastructure and jointly build connectivity to rural areas, they said. No final decisions have been made and the two companies may not reach an agreement, they said. Vodacom, Africa’s largest mobile operator, is also in talks with service providers in other countries that it has a presence in, said the people. 

“We are looking at partnerships with other mobile operators and financial investors in countries where we operate,” a representative for Vodacom said in an emailed statement. “Our aim is to potentially alleviate the costs of rollout and rural connectivity, helping to address cost to communicate and narrow the digital divide.” The spokesperson said the company would comment on specific agreements once they’ve been finalized. 

A representative for Orange declined to comment on specific talks, but said that the company’s stance is that “sharing certain network infrastructure with other operators in such large territories makes sense” because it “could facilitate improved coverage and network quality for customers.”

Vodacom and Orange are each working to expand to capture the market’s exploding growth — particularly for mobile services where young, tech-savvy users are spending more time on devices to access everything from entertainment to financial services. The African businesses are proving to be growth drivers for each group’s European parent companies. 

Still, it’s an expensive exercise, especially when building out infrastructure to more rural areas where capital returns are usually lower. Joint ventures between operators would ease that financial burden. 

 

(Updates with response from Orange in fifth paragraph)

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