Tiscali SA has reached an agreement to sell its cellular business to the Vodacom Service Provider Company.
A statement issued yesterday afternoon says the cellular operations have been sold as a separate business unit and the deal is subject to Competition Commission approval.
No details have been released on the actual cost of the transaction, or how many mobile subscribers Tiscali SA has. However, market sources say it is probably in the region of 15 000 individual customers.
In August, Tiscali reached an agreement to sell its Internet service provider operations to M-Web for R320 million and that deal is also awaiting Competition Commission approval.
These sales form part of previously announced plans to divest Tiscali of its South African divisions as the European operation had to restructure in order to lessen its debt burden.
The sale to Vodacom means a full circle for subscribers, as Vodacom originally owned the Tiscali SA predecessor, the now defunct WorldOnline.
Arthur Goldstuck, founder of research firm World Wide Worx, says the transaction comes as no surprise and is an extension of Vodacom`s strategy of consolidating its service providers under the Vodac (Vodacom Service Provider Company) umbrella.
"While Tiscali`s mobile operations were not its core business, it was important to them because their Internet subscriber growth was stagnant."
Goldstuck says with hindsight Tiscali SA would not have bought the cellular base four years ago. "But then the thinking was that convergence between mobile and Internet would have been a lot faster."
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