While it is well known in the industry that French telco Orange is looking to significantly expand its footprint in SA, it does not appear a rumoured deal with Vodacom will come to fruition, writes Sunday Times.
The newspaper notes that, although there are a number of rumours regarding possible tie-ups between telcos, the only one to be confirmed this year was Vodacom's plan to buy Neotel for an amount rumoured to be between R5 billion and R10 billion. Other unconfirmed speculation includes hearsay of a deal between Cell C and First National Bank, and Cell C and Telkom.
US telco AT&T is looking at a takeover of Vodafone, which owns 65% of Vodacom, the report notes, sparking speculation that the company would cut loose Vodafone's emerging market assets and focus on Europe.
Sunday Times says speculation is growing that Orange is the most likely bidder for Vodacom. Other names include America Movil - the Mexican telecoms company owned by Carlos Slim - and China Mobile.
However, Sebastien Crozier, Orange Horizons MD, told Business Times this week that there had been no discussions with Vodacom. Sunday Times says a major stake in Vodacom would help Orange realise its local plans because of Vodacom's operations in Botswana, Tanzania, the Democratic Republic of Congo, Mozambique and Lesotho, as well as SA.
"But Crozier says it is eyeing spectrum that will become available after Vodacom finalises its purchase of Neotel."
Crozier reportedly said the spectrum would enable Orange to develop a mobile virtual network operation - a move the company is in discussions with the Independent Communications Authority of SA about.
The Sunday paper points out that Vodacom already owns 50% of the market and so it could be considered anti-competitive to allow the company to keep the spectrum should the Neotel deal go ahead.
The report cites Crozier: "We would be able to create innovations on products and prices [using this spectrum]."
If Orange gets access to the spectrum, says the report, it would be able to set up as a mobile operator in SA by renting capacity from Vodacom, MTN and Cell C. "Orange could also then develop its own product range and use the financial muscle of the parent company to carry it through a few years of losses as it woos customers."
All the local speculation in the mobile realm, says Sunday Times, comes amid a series of global mega-mergers and divestments that may also affect local ownership structures - possibly clearing a path for a new entrant.
The paper points out that Vodafone is in the process of selling its stake in Verizon - the largest mobile operator in the US - to its joint venture partner Verizon Communications. "The deal, which will be concluded next year, is worth a jaw-dropping $130 billion."
Share