By Shina Badaru

Lagos. July 4, 2008. World’s biggest mobile phone company, Vodafone of UK says it has reached a $900 million deal with the Ghanaian government to acquire 70 per cent of Ghana Telecommunications Company Limited (Ghana Telecom) in yet another major telecoms transaction trailing last month’s offer of the country’s sixth mobile licence to Nigeria’s second national operator, Globacom Limited.

As companies make a bullish run for the West African nation, with the acquisition by wholly-owned subsidiary, Vodafone International Holdings B.V., the UK operator makes a strategic entry into Ghana on the platform of the country’s leading fixed line service provider, Ghana Telecom that also owns number three mobile operator, One Touch.

It also reached a deal with the Ghanaian government, which retains the remaining 30 per cent of Ghana Telecom, to have the nation’s optical fibre network transferred to the latter. Both parties are hoping that the deal will be concluded by end of third quarter of the year when it sails through the country’s Parliament, the company said yesterday in a statement.

Outgoing CEO, Vodafone, Arun Sarin says “Ghana is one of the most attractive markets in Africa with mobile subscribers growing at more than 55 per cent p.a. and mobile penetration around 35 per cent. Our extensive operating experience together with our portfolio of products and services position us well to deliver a superior mobile experience to Ghanaian customers and significantly improve financial performance. I expect that our investment will generate substantial benefits for Vodafone and for the Ghanaian economy and we are delighted that we will be working in partnership with the Government of Ghana.”

Technology Times checks reveal that Globacom had also made a bid for the Ghana Telecom’s stakes. It eventually settled for the $50.1 million licence sold to its wholly-owned subsidiary, Glo mobile Ghana Limited, to become the sixth mobile operator. Indications emerging from Ghana are that Egypt Telecom, France Telecom, Portugal Telecom as well as undisclosed bidders from Ghana and India may have also had their eyes on the telecoms company.

For the UK operator, the deal is not only about telecoms alone as it cites recent discovery of oil field in Ghana as some of the strategic rationale for its planned foray to ensure “exposure to the attractive and growing Ghanaian telecommunications market.”

According to the operator, it sees potentials in low mobile telephony penetration in the market where just 2.7 million lines were added last year to an estimated 24 million population that has more than 50 per cent being under the age of 25.

Vodafone also see major turnaround potentials in Ghana Telecom with its majority control of the leading fixed-line operator that recorded 379,000 subscribers at the end of first quarter 2008. The Ghanaian operator also owns the number three mobile network accounting for about 17 per cent market share and 1.4 million subscribers at the end of first quarter of 2008. Within the same period, it recorded 15,000 broadband lines.

On the other hand, Vodafone has equity interests in 26 countries and partner networks in over 40 additional countries and accounts for about 260 million proportionate customers worldwide at the end of first quarter 2008.

Ghana Telecom leads in the fixed-line space and broadband market with 99 per cent of the market for fixed lines and 90 per cent of retail ADSL service. It recorded a 9.3 per cent revenue growth in the 12 months ended December 31, 2007 to $290 million and reported EBITDA earnings of $42 million within the same period.

According to Sarin, Vodafone hopes to inject $500 million into the company under the turnaround plan that will address its operations and network, restoring and expanding network coverage and completing and integrating the fibre backbone.

“Vodafone plans to leverage its experience of rapid network deployment in India and other emerging markets, its brand and successful customer propositions such as M-PESA and ultra-low cost handsets, to accelerate Ghana Telecom's growth”, says the Vodafone boss.

He adds that, “through these actions, Vodafone intends that Ghana Telecom will deliver a superior product and service offering in the Ghanaian market and thereby raise its mobile market share over time to around 25 per cent, reversing recent underperformance.”