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Last Updated: Monday, 22 December, 2003, 17:04 GMT
Vodacom's $600m Nigerian pledge
Man on mobile phone
Nigeria is one of Africa's star mobile markets
Vodacom, South Africa's leading mobile phone operator, has pledged to invest some $600m in Nigerian number two operator Econet Wireless Nigeria.

The South African firm made the cash announcement after it revealed it had signed a management agreement to take over Econet after weeks of speculation.

Under the deal Vodacom will acquire 51% of the cash-stapped Nigerian company.

But Vodacom's $250m bid is faces a court challenge from Econet's founder, a South African rival.

Econet Wireless International (EWI) - which owns 5% of EWN, as well as operations in a number of southern African countries - was a founding technical partner in the EWN operation.

Arbitration

EWI wants to stop the Vodacom deal and has applied to the International Court of Arbitration, which has agreed to appoint a panel to hear the dispute.

It is not known how successful or futile this challenge will be.

EWI's opposition to letting Vodacom in caused a breach between the parent company and EWN's management, who are keen to use Vodacom's deep pockets to fund expansion.

"The management agreement will enable Econet Nigeria to draw from the goodwill and expertise of Vodacom... boost the Econet Nigeria network operations, and strengthen it to compete more aggressively in the Nigerian mobile market," EWN said in a statement.

Vodacom intends to buy an initial 33.3% stake in EWN, before ultimately increasing this to 51%.

The South African company is itself 50% owned by home-grown company Telkom, and 35% by UK-based Vodafone.

Econet Wireless Nigeria began business in August 2001 and is among four operators licenced to run digital mobile phone services in Nigeria.

With a vast population of 126m people and a low mobile phone take-up rate to date, telecoms analysts see the country as a major growth market.


SEE ALSO:
Nigeria phone row goes to court
04 Nov 03  |  Business


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