Congo Wireless Networks (CWN) has reportedly withdrawn its petition blocking the sale of Vodacom’s 51 percent stake in its Congo venture, Vodacom Congo. According to reports, Alieu Conteh, the chairman and founder of CWN said that he’s instructed the lawyers to withdraw the case against Vodacom. He added that Vodacom is selling and they want to assist them in any way possible.
As reported by Wireless Federation earlier, Vodacom was looking to sell its stake in the company in an attempt to end a dispute with CWN regarding the structure and funding of Vodacom Congo. As per sources, the court had ordered Alieu Conteh to step back and allow the shareholders to discuss the sale. Reports suggest that operators MTN and Unitel have shown interest in acquiring Vodacom’s stake in the event of a sale.
Vodacom, a dominant wireless service provider in South Africa, may be facing legal action as it seeks to sell its stake in the Congo venture. As per reports, Alieu Conteh, Chairman and Founder, Congolese Wireless Network (CWN) SPRL, has said that the company’s lawyers have filed an application in a Kinhasa court to stop the sale, and that the Commercial Court will consider the merits of the case next week. He added that they will send a letter to all the main shareholders in an attempt to block the sale. Further, CWN has reportedly informed Vodacom that it would use its right of first refusal if it didn’t agree to terms of the sale.
Vodacom Congo has reportedly responded saying that the company needs capital to expand and deliver on the potential of the country. Further, continued delays, groundless accusations, and court action are utterly counterproductive and serve only to damage the future prospects of the business. Vodacom Congo, the third largest operator in the country had 4.2 million subscribers at the end of March. As per industry sources, the company has a subscriber base of 65 million people and a mobile penetration rate of 17 percent.
The MTN Group, Africa’s leading telecommunications provider, might be bidding for Vodafone Group’s wireless unit Vodacom Congo, as suggested by reports. Sources claim that last week MTN made a presentation to Vodacom which is owned by Vodacom Group Ltd. (51%), further controlled by Vodafone.
Vodacom has been involved in a dispute with its local partner Congolese Wireless Network SPRL regarding funding and operational structure following a capital inflow of $484 million by Vodacom. As per reports, Pieter Uys, CEO Vodacom has said that Vodacom may sell its stake to end the dispute.
Industry analysts believe that this deal could be beneficial to MTN as it would help better its operations in such a big market and strengthen its grip on the African continent. Vodacom Congo reported a subscriber base of 4.2 million at the end of March 2011.
MTN has its operations across 22 markets in Africa and the Middle East with over 150 million subscribers. The company is the market leader in Ghana controlling over 50% of the market share.