Vodafone to Hand Management of Ghana Unit to Africa Operation

Loni Prinsloo and John Bowker, Bloomberg News

A Vodacom logo sits on display outside the Vodacom World mall, operated by Vodacom Group Ltd., in the Midrand district of Johannesburg. Photographer: Waldo Swiegers/Bloomberg , Photographer: Waldo Swiegers/Bloomberg

(Bloomberg) -- Vodafone Group Plc will hand over management of its Ghana unit to the U.K. carrier’s separately listed South African division in April, the latest step to bring the company’s operations on the continent under one roof.

Johannesburg-based Vodacom Group Ltd. will take responsibility for the West African business alongside other units including Tanzania, Mozambique, the Democratic Republic of Congo and South Africa, Chief Executive Officer Shameel Joosub said in an interview. Vodafone Ghana will keep its branding and there will be no transfer of assets from the U.K. parent, he said.

The move marks the second change by Vodafone to its Africa operations this year, part of a wider effort to simplify the sprawling global carrier and focus management attention on fiercely competitive European markets.

The Newbury, England-based company agreed to sell its Egyptian business to Saudi Telecom Co. for $2.4 billion last month to focus on the sub-Saharan region. And in 2017, Vodafone transferred a minority stake in Kenya’s Safaricom Ltd., East Africa’s biggest company, to Vodacom in an all-share deal worth about $2.6 billion.

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The changes add the kind of geographical reach that Vodacom could benefit from if the parent company eventually decides to sell down its 60% stake. Even if it doesn’t -- Joosub said such a move is not on the cards -- putting the African businesses under the same management may help Vodacom gain economies of scale.

“The larger group has sold some assets in north Africa, and the focus will be on sub-Saharan Africa under Vodacom,” Joosub said at the carrier’s offices north of Johannesburg.

The CEO was also awarded a place on Vodacom’s executive committee late last year, bringing him closer to the ear of Vodafone CEO Nick Read.

Ethiopia Opportunity

Vodacom has shown interest in Ethiopia’s planned privatization of its state-owned phone monopoly, which will involve the auction of two new licenses and the sale of a minority stake in Ethio Telecom later this year. While the timetable was recently pushed back, Joosub said he expects an information memorandum to be issued in April and May and the deals to be finalized in June.

Vodacom will partner with Safaricom on any bid, the CEO said. His counterpart at the Nairobi-based company, Michael Joseph, estimated last year that each license would cost about $1 billion, but Joosub countered that it’s still too early to say.

“It will come down to the price points, the license fees and what obligations are attached,” he said. “We have multiple teams on the ground to evaluate the market. They are compiling business plans to understand the opportunity.”

Other companies to have made their interest in Ethiopia clear are Paris-based Orange SA and Vodacom’s Johannesburg-based rival, MTN Group Ltd. With a fast-growing population of more than 100 million and limited high-speed connectivity, the Horn of Africa nation is an attractive market, Joosub said.

--With assistance from Amogelang Mbatha and John McCorry.

To contact the reporters on this story: Loni Prinsloo in Johannesburg at lprinsloo3@bloomberg.net;John Bowker in Johannesburg at jbowker2@bloomberg.net

To contact the editors responsible for this story: Thomas Pfeiffer at tpfeiffer3@bloomberg.net, Jennifer Ryan