Ghana approves Vodafone's Telecom buy out

The Ghanaian parliament has approved a controversial deal that will see Vodafone, the world’s biggest mobile operator in terms of revenue, take a 70 per cent holding in state owned Ghana Telecom.

The vote was passed late Thursday, after days of protests organised largely by the government opposition party National Democratic Congress and its allies.

Vodafone will pay up to $900m for the stake, but there have been allegations from those opposing the deal that Ghana is being short changed.

In a speech earlier this week, officials from the Ghanaian Ministry of Communications sought to diffuse the criticisms, saying that, “The security and livelihood of the over 4000 workers [at Ghana Telecom] and their families are in danger if we were not to engage a strategic investor such as Vodafone to team up with our local expertise.This Government has never and will never shortchange Ghanaians.”

Incumbent fixed line carrier, Ghana Telecom, which owns a wireless unit operating under the One Touch brand, is the country’s third largest player with a mobile market share of 16 per cent. It competes against market leader Scancom, second placed Millicom and Kasapa, in a country with almost 40 per cent market penetration.

Vodafone earlier said the privatisation move values the Ghanaian operator at around $1.3bn and gives the UK firm access to one of the remaining attractive markets in the region.

The move was also a final feather in the cap for ex-Vodafone chief Arun Sarin who stepped down at the end of July. “Ghana is one of the most attractive markets in Africa with mobile subscribers growing at more than 55 per cent p.a. and mobile penetration around 35 per cent. Our extensive operating experience together with our portfolio of products and services position us well to deliver a superior mobile experience to Ghanaian customers and significantly improve financial performance,” he said.

Sarin said that over the next five years Ghana Telecom is to invest over $500m in its operations and network, restoring and expanding network coverage and completing and integrating the fibre backbone, as well as introducing initiatives such as M-PESA and ultra-low cost handsets.