Vodacom may pull out of its Democratic Republic of Congo (DRC) operation, if it does not resolve a shareholder dispute in the next six months.
Vodacom has been locked in a dispute with fellow shareholder Congolese Wireless Networks (CWN), which owns a 49% stake in the operation, for several months over a funding agreement between the shareholders.
The Congolese company accused Vodacom of forcing its DRC operation to pay up to $180 million to satisfy loan agreements with “uncommercial terms and conditions”. In January, CWN threatened to take the matter to the courts in Kinshasa. CWN has also accused Vodacom International of plundering Vodacom Congo of capital.
Vodacom CEO Pieter Uys says the matter is still in arbitration at the International Trade Commission court, but talks are continuing between the parties. He explains that the arbitration process allows for ongoing discussions in a bid to resolve the matter.
Uys says Vodacom hopes to reach a favourable outcome within the next few months, but there has not yet been a positive outcome. He says, however, that the parties are “talking to each other”.
However, should the impasse not be resolved within the next six months, Vodacom will look at selling the unit, says Uys.
Vodacom's DRC operation had 3.6 million subscribers at the end of September, a 17.4% decline year-on-year. The company has about 40% of the market in the DRC, which has a low penetration rate at 14%.
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