Mobile operator takes 70% stake in Ghanaian incumbent; commits to boosting mobile market share, fixed network investment.
Vodafone has announced the acquisition of a 70% stake in Ghana Telecommunications Company at a cost of US$900 million (£452 million), a deal that values the telco at $1.3 billion. 

Ghana’s government, which sold the majority stake to Vodafone, will retain the remaining 30% stake in the national telecoms incumbent.

The deal gives Vodafone control of Ghana’s dominant fixed-line and broadband provider, and its third-largest mobile player, which operates GSM services under the Onetouch brand.

“Ghana is one of the most attractive markets in Africa with mobile subscribers growing at more than 55% p.a. and mobile penetration around 35%,” outgoing Vodafone CEO Arun Sarin said in a statement.

“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,” he added.

According to Vodafone, Onetouch had 1.4 million customers, a market share of 17%, as of the end of March. Meanwhile, Ghana Telecom claims a 90% share of the country’s retail ADSL market and controls 99% of access lines. That is, 379,000 fixed lines and 15,000 broadband connections as of the end of Q1.

Vodafone said Thursday it aims to raise the telco’s mobile market share “over time” to 25%.

The mobile giant said it will use its experience of rapid network deployment gained in India and other emerging markets, as well as its brand and certain customer propositions – such as its low-cost handsets and M-PESA money transfer service – to gain traction in Ghana.

Vodafone also said it expects Ghana Telecom to invest $500 million-plus in its operation and network over the next five years, as it seeks to extend network reach and complete its fibre backbone.

Under the terms of the acquisition, the Ghanaian government will transfer its existing fibre network assets to Ghana Telecom.

The acquisition is in line with Vodafone’s recent M&A strategy.

At the company’s full-year results presentation in May, EMAPA business group head Paul Donovan highlighted that Vodafone is “interested in large markets in Africa and Asia”, suggesting that the Ghana deal is unlikely to be the last.

The Arun Sarin era was epitomised by the purchase and sale of assets, with emerging market deals making up the bulk of the former. Indeed, the acquisition of emerging-market players – particularly its Indian and Turkish operations – played a large part in Vodafone’s subscriber growth under Sarin: as of the end of March the operator had a global proportionate customer base of 260 million, up from 120 million when the CEO took up his post five years ago.

Ghana represents an attractive opportunity for Vodafone. Low mobile penetration leaves room for growth, and the country has a strong youth market; more than 50% of its 24 million inhabitants are under the age of 25.

Vodafone expects the deal to close in Q3.

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