South African door reopens for Vodafone

Having recently failed to gain control of Vodacom, South Africa's largest cellular network operator, U.K.-based Vodafone might be given a second chance. If the Middle Eastern telecoms investment group, Oger Telecom, is successful in its bid to buy a stake in Telkom South Africa, a strategic review looks likely with regard to the 50 per cent holding that Telkom has in Vodacom.

While not admitted publicly, Telkom is keen to end its acrimonious partnership with Vodacom but not before striking a deal with another cellular operator in order to continue its involvement in the profitable cell phone business. The approach from Oger Telecom could resolve this issue, given that the Dubai-based group already owns 75 per cent of South Africa's third largest mobile operator, Cell C.

Vodafone, which owns the remaining half of Telkom, has pre-emptive rights to buy the fixed-line operator's stake in Vodacom and is keen on expanding its presence in emergent markets. However, the deal has recently become more complex by the announcement that Saudi Telecom (ST) was to acquire a 35 per cent shareholding in Oger Telecom for US$2.56 billion--an indication of ST's own intentions of expanding into new markets.

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