Government announces agreement with Vodafone

Accra, July 3, GNA - Government on Thursday said it had reached an agreement with Vodafone, the world's leading mobile telecommunication group, in a partnership deal for 70 per cent of its shares in Ghana Telecom.

The Government will retain a 30 per cent stake in Ghana Telecom. A statement signed by Mr Stephen Asamoah-Boateng, Minister of Information, said an understanding had also been reached with Vodafone to float GT shares on to the Ghana Stock market as soon as possible. The transaction is, however, subject to approval by Parliament.

"In consideration of this agreement, Ghana Telecom's enterprise value is approximately US$1.3 billion plus a cash injection of US$500 million, totalling US$1.8 billion," the statement said.

It said many benefits would accrue to Ghanaians, including delivery of a superior product and services in every corner of the country, raising GT's mobile market share to provide competitive per minute call charges, efficient service to ensure uninterrupted service to the consumer and injection of substantial investment into the economy.

The statement said Vodafone would leverage its experience in over 25 countries and partner networks in an additional 42 countries with over 260 million customers worldwide to provide the best service in telecommunication to Ghanaians.

"Vodafone's brand and successful customer propositions such as ultra-low cost handsets will accelerate Ghana Telecom's growth," the statement said.

Commenting on the transaction, the statement quoted Mr Arum Sarin, CEO of Vodafone, as saying that "Ghana is one of the most attractive markets in Africa with mobile subscribers growing at more than 55 per cent per annum 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.

"I expect that our investment will generate substantial benefits for Vodafone and for the Ghanaian economy and we are delighted that we will be working in partnership with the Government of Ghana."

A Vodafone statement obtained by GNA said the company had agreed to acquire a 70 per cent stake in Ghana Telecommunications Company Limited from the Government of Ghana for a total consideration of US$900 million (=A3452 million), on a debt-free, cash-free basis, implying a total enterprise value for Ghana Telecom of approximately US$1.3 billion (=A3646 million).

Vodafone said over the next five years, it expected Ghana Telecom to invest over US$500 million in its operations and network, restoring and expanding network coverage and completing and integrating the fibre backbone.

Vodafone said it planned to leverage its experience of rapid network deployment in India and other emerging markets and its brand and successful customer propositions such as M-PESA and ultra-low cost handsets, to accelerate Ghana Telecom's growth.

"Through these actions, Vodafone intends that Ghana Telecom will deliver a superior product and service offering in the Ghanaian market and thereby raise its mobile market share over time to around 25%, reversing recent underperformance."