LONDON/ACCRA Britain's Vodafone Group Plc (VOD.L) said on Thursday it paid $900 million for a 70 percent stake in Ghana Telecom, the African country's third largest mobile phone operator.
The deal, signed in the Ghanaian capital of Accra, still requires approval of the country's parliament. Vodafone spokesman Simon Gordon said it was expected to be given by the end of the third quarter of 2008.
Vodafone, the world's largest mobile phone group by revenue, said the government of Ghana would retain a 30 percent stake in Ghana Telecom, which has an enterprise value of around $1.3 billion.
"Ghana is one of the most attractive markets in Africa with mobile subscribers growing at more than 55 percent (per annum) and mobile penetration around 35 percent," Vodafone Chief Executive Arun Sarin said in a statement.
A government official said the deal would benefit consumers. "With this, Ghana Telecom will be able to deliver superior product and services to Ghanaians in every corner of the country," Ghana's Information Minister Stephen Asamoah-Boateng said in Accra.
He added that the government also reached an understanding to float Ghana Telecom shares on the Ghana Stock Exchange.
Vodafone said mobile penetration was low at 35 percent in Ghana, which has a population of 24 million with more than 50 percent under the age of 25. About 2.7 million subscribers were added in 2007.
The deal gives Vodafone majority control of the company, which has a 17 percent share of the market and had around 1.4 million customers at the end of March. It is also Ghana's leading fixed-line operator.
Vodafone, which said in May it had no intention of pursuing a bid for South African company MTN Group Ltd (MTNJ.J), already operates in other African countries, including Kenya, Tanzania, Mozambique and the Democratic Republic of Congo.
Shares in Vodafone closed 0.2 percent higher at 152.70 pence.
OPPOSITION QUESTIONS DEAL
The main opposition party in Ghana's parliament, the National Democratic Congress, criticized the process leading to the agreement with Vodafone, saying it lacked transparency and openness.
Haruna Iddrisu, the ranking opposition member in charge of communications, said the price paid by Vodafone was too low.
"It is our belief that the value of GT and all its assets should not be less than $1.5 billion," Iddrisu told Reuters.
He accused the government of exclusively negotiating with Vodafone without consideration for other bidders.
"We are aware of the government's desperate need for cash to finance a gaping budget deficit. However, it is important to advise the government to take into serious consideration the supreme national interest," Iddrisu added.
Gordon, the Vodafone spokesman, said over the next five years the U.K. company expected Ghana Telecom to invest over $500 million in its operations and network to expand coverage.
In 2006, Ghana's government began the process to identify a strategic investor in Ghana Telecom.
It initially received offers from several major companies, including France Telecom SA FTE.PA, Nigeria's Globacom, Telecom Egypt SAE (ETEL.CA) and a Ghanaian-led consortium.
France Telecom offered the highest bid of $550 million for 60 per cent of the shares. Ghana said this did not meet its expectations and suspended the sale.
The government reopened the process in 2008 with Vodafone, leading to Thursday's signing of the deal.
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(Editing by Pascal Fletcher/Jeffrey Benkoe)