Vodafone looks to emerging markets for growth‾

Vodafone Group - the world's largest mobile operator by revenue - has been engulfed in rumours over the Easter weekend. There is speculation that the company is about to slash several thousand jobs at its HQ in Newbury, England and at the same time, seek to expand its activities in Africa.

Vodafone has long eyed African markets. Last November a planned €3.22 billion/£5 billion deal to extend its 50% stake holding in South Africa's dominant mobile operator, Vodacom, was blocked after several months of negotiations. Vodafone jointly owns Vodacom with Telkom, South Africa's incumbent operator. Vodacom has operations in South Africa, Mozambique, Lesotho and Tanzania.

Now, according to South Africa's Sunday Times, Vodafone is in pursuit of a multi-billion rand share of operator MTN. Apparently MTN's CEO Phuthuma Nhleko confirmed that Vodafone was one of the companies that had approached him, but played down any particular significance.

However, against a backdrop of Vodafone allegedly being obliged to slash jobs at home, MTN has just announced a 17% rise in 2007's adjusted headline earnings per share and said it would boost its subscribers by a third this year as expansion into Iran begins to bring in revenue. The operator also said that its customer base had grown by 53% to 61.4 million last year, helped by a strong performance in Iran and forecast an extra 21.8 million subscribers in 2008.

Vodafone's spokesperson Bobby Leach has today denied that any talks are underway regarding the acquisition of a huge stake in MTN's international operations. MTN has operations in Afghanistan, Benin, Bissau, Botswana, Cameroon, Conakry, Congo, Cyprus, Ghana, Iran, Ivory Coast, Liberia, Nigeria, Rwanda, Sudan, Swaziland, Syria, Uganda, Yemen and Zambia.

Nevertheless, as markets in Western Europe mature, operators will need to find growth from somewhere to make up for the lag in anticipated mobile Internet revenues.