South Africa’s Vodacom is believed to be close to signing a deal to acquire Nigerian cellco Vee Networks (which trades under the V-Mobile brand name), barely a year after it exited the country following a messy and protracted battle with the operator’s then-shareholders Econet Wireless. Vodacom withdrew from its five-year contract to manage V-Mobile in June 2004, barely two months after entering the country, when its presence split the operator’s boardroom and led to an investigation by Nigeria’s primary anti-corruption agency, the Economic and Financial Crimes Commission (EFCC). Vodacom has been looking to re-enter the market ever since and a company spokesperson yesterday told Reuters that the group ‘continues to be interested in investing in the Nigerian cellular industry and to that end is engaged in discussions with various interested parties – resolution is expected in the near future’.
However, Vodacom is believed to be facing stiff competition for V-Mobile from Richard Branson’s Virgin Mobile. According to local paper This Day, the UK-based group completed due diligence on V-Mobile earlier this year and is prepared to trump any bid made by Vodacom. Both groups are understandably keen to gain a foothold in the mobile market of Africa’s most populous nation. With wireless penetration of just 6.5% at the start of 2005 there is plenty of room for growth, but with year-on-year expansion continually in triple-digits, neither wants to miss the boat. MTN Nigeria, another South African controlled company, leads the market in terms of subscribers, but V-Mobile holds second place and is well positioned to challenge its bigger rival.
Formerly majority owned by Econet Wireless, V-Mobile is currently controlled by First Bank of Nigeria, Broad Communications, First City Asset Management, Ocean and Oil Networks, Bromley Limited, Leadway Assurance and the investment companies of Lagos, Delta and Akwa Ibom states.