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Last Updated: Monday, 31 May, 2004, 16:43 GMT 17:43 UK
Big Nigeria phone deal called off
Man on mobile phone
Nigeria is one of Africa's star mobile markets
A South African mobile phone giant has pulled out of a $200m deal with Econet Wireless Nigeria (EWN).

In a statement, Vodacom said the pair had "mutually agreed to terminate their current management agreement on an amicable basis".

Vodacom also said its deputy chief executive, Mthobi Tyamzashe, had been sacked amid a management shake-up following the Nigeria decision.

It followed mounting speculation that Vodacom was set to ditch the deal.

Earlier, Reuters reported that in a letter to Econet's chairman, Vodacom chief Alan Knott-Craig had said his firm "can no longer pursue" the transaction.

Under the agreement, signed less than two months ago, Vodacom had been set to manage EWN - Nigeria' s second biggest mobile operator - for five years.

Deal breaker?

Vodacom - the biggest mobile firm on the African continent - would also have spent some $200m upgrading and maintaining EWN's mobile infrastructure.

The deal was seen as a vote of confidence in Nigeria's mobile phone market, tipped for rapid growth as more and more of the country's 130 million strong population sign up for mobile services.

The reason for Vodacom's apparent change of heart remains unclear.

EWN was also tightlipped about the decision.

Chief executive Strive Masiwaya told Reuters: "We are watching the events with interest and will react once the situation becomes absolutely clear."

Legal wrangles

The deal had run into stiff opposition from Johannesburg-based Econet Wireless International (EWI), which owns 5% of EWN's shares.

EWI had taken legal steps to block the Vodacom agreement, arguing that it compromised an existing deal giving it the right to raise its current stake in EWN.

There has also been speculation in the Nigerian press that the deal fell apart after Vodacom refused to pay "brokerage fees" to go-between companies.

Vodacom's main shareholder is South African's biggest telephone company, Telkom, with a 50% stake.

UK-based Vodafone, the world's biggest international mobile phone group, owns a further 30% of the company.

Shares in Telkom were down 2.5% at 77 rand ($11.70, 6.70) on Monday afternoon in Johannesburg.




SEE ALSO:
Vodacom's $600m Nigerian pledge
22 Dec 03  |  Business
Nigeria phone row goes to court
04 Nov 03  |  Business


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