South African operators Vodacom and MTN agreed to acquire mobile subscribers from Nashua Mobile for a reported 2.26 billion rand (€155 million/$214 million), as the reseller prepares to exit the local mobile market.
Nashua Mobile parent Reunert confirmed that its subsidiary will sell "relevant segments of its customer base" to the two operators, in a statement issued Monday. The company took action following declines in Nashua's ARPU, caused by lower network tariffs and a drop in customers' out of bundle spending. Nashua is also battling declines in its least cost routing (LCR) business, and general pricing pressure in the South African market.
"This was a strategic decision on our part," Mark Taylor, Reunert executive director and CEO of Nashua Mobile explained. "Our priority now is to ensure that we maintain our service levels to our customers, and that they are migrated seamlessly."
Vodacom told FierceWireless:Europe it will acquire 400,000 of Nashua's 950,000 subscribers. Vodacom Group CEO, Shameel Joosub, said the deal will have no impact on Vodacom's reported customer base in South Africa as it already includes Nashua's subscribers in its figures. "We're looking forward to the opportunity of managing this customer base directly," Joosub said, adding: "The net effect for these customers is simply that they will now deal directly with Vodacom."
MTN is likely to acquire 487,000 subscribers, based on a Bloomberg report stating there are a total of 887,000 Nashua customers included in the deal. Vodacom and MTN will pay a combined 2.26 billion rand, the news site reported.
Taylor said Nashua Mobile is "working hard" to "minimise the impact of this transaction on our employees." Company information states Nashua had 601 permanent staff, though Bloomberg placed the figure at 700. The company operates 16 directly stores in South Africa, and has a further 78 franchise stores.
Reunert stated the deal to sell its subscribers will take several months, and pledged to continue Nashua's services as usual while competition authorities consider the deal. Vodacom and MTN will maintain subscriber contracts after the acquisition is cleared, the company statement revealed.
The company decided to shutter Nashua Mobile after it failed to renew reseller agreements with MTN and Vodacom. Nashua is also seeking a third-party buyer for customers signed up under a reseller agreement with South African operator Cell C.
Reunert plans to use the proceeds of the subscriber sale to settle outstanding Nashua liabilities, and will then examine whether to pay a shareholder dividend, or fund the repurchase of shares, local news site MyBroadband reported.
For more:
- see the Reunert statement
- see this Bloomberg article
- see this MyBroadband report
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